Pulai Springs to be privatised

KUALA LUMPUR: The new major shareholder of Pulai Springs Bhd wants to privatise the Johor-based golf course operator, said sources close to the company.

The rationale for the privatisation exercise could be the fact that Pulai Springs' assets are undervalued, the sources said.

In an announcement to Bursa Malaysia, the company said it had been notified by major shareholder Swift Redeem Sdn Bhd that it was currently in the midst of finalising a "corporate proposal within the ambit of the Malaysian Code on Takeovers and Mergers 2010, involving the voting shares of Pulai Spring".

Pulai Springs requested for trading suspension on its shares.

Swift Redeem surfaced as a major shareholder last Monday after it bought over the 32% equity stake in Pulai Springs from Sepenah Emas (M) Sdn Bhd, which ceased to be the substantial shareholder after the divestment. The block of shares were transacted at 80 sen per share.

Interestingly, both Swift Redeem and Sepenah Emas are related to its executive director Mah Siew Chean. Sepenah Emas is the vehicle of Mah while Swift Redeem is controlled by Mah and Christopher Mah Siew Houk.

Pulai Springs' share price had rallied recently. The hardly-traded counter surged to a high of 90 sen before it was suspended from trading. Prior to the surge, the stock was trading below 50 sen.

Apparently, Pulai Springs has assets worth about RM119.7 million that have not been valued since 2000. And those assets are believed to have appreciated in recent years. Its net asset per share was RM1.27 as at March 31.

The company's main asset is Pulai Springs, an 18-hole golf course and resort in Johor. Its latest annual report shows that the asset was valued at about RM97.4 million as at May 2000, compared with the company's market capitalisation of about RM97 million. Pulai Springs also owns another plot of land and a building in Kota Tinggi, valued at RM22.28 million.

For its 1QFY11 ended March 31, Pulai Springs incurred a net loss of RM2.11 million on revenue of RM9.8 million.

The other substantial shareholders are Tan Sri Abu Sahid Mohamed with 18.12% and Singapore-listed PSC Corp Ltd with a 17.63% stake.

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