Insider Moves: Zecon Bhd, LKL International Bhd, Mega Sun City Holdings Bhd, Fitters Diversified Bhd, London Biscuits Bhd

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Notable filings

ON July 18, little-known Digital Network Sdn Bhd re-emerged as a substantial shareholder of construction, property development and hospital maintenance company Zecon Bhd, after subscribing for 14.69 million shares through the company’s private placement exercise.

Digital Network was a substantial shareholder of Zecon from May 2006 to June 2007, and from April 2008 to October 2011.

The placement shares gave Digital Network a 10.2% stake, making it the second largest shareholder after Datuk Zainal Abidin Ahmad with 45.9%. The counter closed at 29.5 sen last Wednesday, valuing the group at RM43 million.

The fundraising exercise — which raised RM3.67 million, of which about 98% will be used for working capital — was a short-term measure taken by the company to ensure that it continues to be a going concern.

To regularise its financials, Zecon has fully settled its syndicated term financing, which had been arranged by Affin Hwang Investment Bank Bhd, through a refinancing exercise in the form of a term-loan facility of up to RM595.54 million granted by MBSB Bank Bhd.

It is also in the midst of discussions with other financial institutions to refinance and/or restructure its other financing facilities. Furthermore, it is looking at monetising certain property assets.

On July 15, LKL International Bhd announced that AI Capital Sdn Bhd had ceased to be a substantial shareholder of the manufacturer of hospital furniture, after disposing of 14.77 million shares or a 3.44% stake through off-market deals.

AI Capital is the investment vehicle of Tan Chuan Hock, who resigned as a non-independent non-executive director of LKL on June 4 due to personal commitments. The shares were acquired by Lim Kon Lian, the largest shareholder of LKL.

In the financial year ended April 30, 2019, LKL recorded a net loss of RM2.5 million — a 56% increase over the previous year’s figure. The counter closed at 10.5 sen last Wednesday, valuing the group at RM45 million.

Over at Mega Sun City Holdings Bhd, its former executive chairman Datuk Seri Lee Hock Seng ceased to be a substantial shareholder on July 17 after disposing of 10 million shares or a 4% stake through a direct business transaction.

Lee had resigned as executive chairman of the project engineering consulting company on June 28 to pursue his personal interests. Last Wednesday, the counter closed at 10.5 sen, giving the group a market value of RM26 million.

 

Notable movements

Datuk Leong Kok Wah ceased to be a substantial shareholder of Fitters Diversified Bhd on July 19 after disposing of four million shares or a 0.83% stake in the manufacturer and distributor of orientated poly­vinyl chloride pipes.

Fitters closed at 42 sen last Wednesday, valuing the group at RM192 million. During the period under review, from July 15 to 19, the stock was trading at 42 sen to 45 sen.

In the first quarter of the year, its share price rallied 40% from 40 sen to reach a year-to-date peak of 56 sen on March 6. Since then, the stock has been trending downwards, dropping to 40 sen on June 7.

London Biscuits Bhd saw its share price plunge 21.4% during the period under review to 16.5 sen on July 19. The counter closed at 15.5 sen last Wednesday, valuing the group at RM45 million.

Year to date, the confectionary maker’s share price has been badly battered, losing 72% of its value. It is trading at an annualised price-earnings ratio of just 2.07 times.

From July 16 to 19, Lee Kwee Cheng disposed of 8.25 million London Biscuits shares, reducing his stake by 2.84% to 8.05%.