Saturday, September 20, 2008

19-09-2008: Puncak Niaga in RM320m call option exercise

KUALA LUMPUR: Puncak Niaga Holdings Bhd (PNHB) is re-acquiring its divested stake of 1.75 million shares in Puncak Niaga (M) Sdn Bhd (PNSB) via a RM320.25 million call option exercise.

Puncak Niaga said it was exercising the call option on the 17.5% stake in PNSB based on its agreement with Arena Tekad Sdn Bhd (ATSB) on Dec 19, 2006, turning PNSB into a wholly owned subsidiary.

“The exercise of the call option... will enable Puncak Niaga to re-consolidate the performance of PNSB (specifically the divestment stake) into its consolidated financial statements, which will in turn enhance PNHB’s financial performance,” Puncak Niaga said in a filing to Bursa Malaysia Securities yesterday.

According to Puncak Niaga, as the exercise price did not exceed 5% of the divestment consideration, shareholders’ approval was not required as the company had secured the mandate during its EGM on Dec 11, 2006.

Puncak Niaga also identified risk factors that could impact the interests of its shareholders.

“Based on the audited balance sheet of PNSB as at Dec 31, 2007, the reacquisition of PNSB will give rise to a proforma goodwill of approximately RM95 million. As goodwill is subject to impairment test, the future profit and net assets of the group may be adversely impacted should the future revenues generated by PNSB deteriorate,” the company cautioned.

On the impact on future earnings, Puncak Niaga said that there was no “absolute assurance that PNSB’s future performance will continue to grow”.

“High inflation rate and adverse global economy may hamper the future performance of PNSB,” the company added.

Commenting on the exercise price, Puncak Niaga said it was arrived at based on the prevailing market value mutually determined and agreed between ATSB and PNHB on Sept 18, 2006.

Puncak Niaga said that it did not expect the call option exercise to cause any material impact on its share capital, earnings and return on equity, dividends, substantial shareholders’ shareholdings and net assets.

ATSB acted as a special purpose vehicle to facilitate Puncak Niaga’s capital repayment exercise.

In October 2006, Puncak Niaga entered into a conditional share sale agreement with ATSB to divest the 17.5% stake for RM306.25 million as part of the capital repayment exercise it was undertaking at the time.

The divestment was completed on Dec 19, 2006, when both companies entered into the call option agreement. Puncak Niaga completed its capital repayment exercise in March last year.

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