Tham consolidates shareholding in E&O

KUALA LUMPUR: In what appears to be a move to consolidate his shareholding in Eastern & Oriental Bhd (E&O), its managing director Datuk Terry Tham Ka Hon has seen his direct interest in the company increasing over the past few weeks.

Correspondingly and pursuant to what is believed to have been agreed previously, Tham and Singapore’s G.K. Goh Holdings Ltd have ended their partnership in their private vehicle, Ample Echo Ltd, which now holds a direct stake of 7.21% comprising 54.95 million shares in E&O.

According to E&O’s 2009 annual report, Tham’s direct stake in the company was 1.89% as at July 2009 and an indirect stake of 16.68% via Ample, Terra Realty Sdn Bhd (TRSB) and Pusaka Setia Sdn Bhd.

On April 21, Pusaka Setia ceased to be a substantial shareholder after disposing of a 0.5% stake comprising 4.1 million shares in E&O to Tham through a direct transaction. Post-disposal, Pusaka Setia’s stake was reduced to 4.68% from 5.58% while Tham’s direct stake rose to 4.59% from 4.06%.

According to the latest filings with Bursa Malaysia, Tham had on April 27 disposed of his entire 33.33% stake in Ample to G.K. Goh, thereby ceasing to have an indirect interest in E&O via Ample, which had held 12.43% of E&O.

Tham simultaneously bought 27.5 million E&O shares from Ample, raising his direct stake to 8.2%. Tham still holds 7.97% of E&O indirectly.
Following Ample’s disposal of the 27.5 million E&O shares to Tham via a direct business transaction, G.K. Goh’s interest (all indirect) was reduced to 11.87% comprising 90.44 million shares.

Accordingly, GKG Investment Holdings Pte Ltd’s, Goh Yew Lin’s and Goh Geok Khim’s respective indirect interests in E&O were reduced to 12.14%, comprising 92.46 million shares.

Tham’s apparent move to restructure his shareholdings in E&O is in stark contrast to speculation that his stake in the company is up for sale.

Rumours have been rife that Tham, who is now based in the UK, is looking to cash out his stake in the property development company. Nonetheless, Tham’s move has also raised questions on whether the consolidation exercise would enable him to sell his entire block in the company in the future.

E&O has landbank in Penang and Kuala Lumpur. Last February, it secured a 50% take-up of the units from the first block of its RM1.8 billion Quayside seafront luxury condominiums within the first week of launch. It also has other development projects in prestigious locations including the Dua Residency in Jalan Tun Razak here.

E&O also has businesses in the hospitality sector. It has the Eastern & Oriental Hotel and Lone Pine hotel under its belt, both located on Penang’s prime seafront.

The company posted a net profit of RM10.49 million in its third quarter ended Dec 31, 2009 versus a net loss of RM4.38 million a year earlier.

Revenue rose 28% to RM80.9 million from RM70.2 million previously. The company attributed the increase in earnings to effective pre-emptive balance sheet management strategy coupled with a higher contribution from the property and hospitality divisions on the back of lower finance costs.

This article appeared in The Edge Financial Daily, May 6, 2010.

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