Symphony House to obtain nod on Ranhill RTO by year-end

KUALA LUMPUR: Symphony House Bhd expects to obtain the Securities Commission Malaysia’s approval on the proposed reverse takeover (RTO) of the firm by Ranhill Energy and Resources Bhd over the next three to four months.

“We are looking at possibly obtaining all approvals by November or December, and then the relisting of the new entity probably by sometime February next year,” said Symphony House group chief executive Tan Sri Azman Yahya after the firm’s annual general meeting yesterday.

Under the RTO exercise, Symphony House will become a unit of newly incorporated, special purpose vehicle Ranhill Holdings Sdn Bhd, which will be listed in its place on Bursa Malaysia.

Ranhill Holdings will facilitate the injection of Ranhill Energy’s water and power assets, with the issuance of new shares worth RM800 million at RM1.60 each, plus paying another US$25.4 million (RM81.53 million) cash. In addition, it will also acquire a 51% equity interest in oil and gas (O&G) outfit Ranhill Worley Parsons Sdn Bhd from Ranhill Energy, at a call option price to be determined upon the RTO exercise.

Commenting on the assets to be injected or acquired, Azman said these are steady businesses with stable income streams.

“On top of Syarikat Air Johor Sdn Bhd, which is the biggest contributor [to Ranhill Energy], they [Ranhill Energy] have successfully expanded into China and have about 10 small concessions there. They also have about five to six concessions in Thailand and are expanding into Vietnam.”

Additionally, Azman noted that Symphony House would have the opportunity to enter into the O&G sector through Ranhill Worley Parsons, which he sees as an “upside”.

Symphony House reported net losses of RM38.9 million each in the last two financial years.

Leading to the RTO exercise, the firm has divested its existing businesses, such as Symphony BPO Solution Bhd — which houses its contact management and financial solutions business — as well as Symphony Xen Solutions Sdn Bhd and Symphony Xen Solutions Pte Ltd, the wealth management solutions arm. It is still looking for a suitable buyer for Symphony HRS Sdn Bhd, which is involved in human resources and payroll outsourcing services.

“We’re left really only with our corporate services [division], which we would be taking private,” said Azman, noting that this business is steady but has limited growth.

As a show of commitment to the enlarged entity in Ranhill Holdings, Azman has offered to serve as the chairman and volunteered to a three-year moratorium in respect of his eventual shareholdings in the new firm. His held direct and indirect stakes of 37.22% in Symphony House as at May 9 this year, which will eventually result in a 4% to 5% stake in Ranhill Holdings.

This article first appeared in The Edge Financial Daily, on July 1, 2014.