Corporate results: Securities Commision, Crescendo, CIMB, Transocean, FGV

SC maintains on Lotte Chemical Titan, directors & advisors
Securities Commision Malaysia (SC) has maintained its decision to reprimand and impose penalties amounting to RM2.19 million on Lotte Chemical Titan Holding Bhd, its executive directors and advisers. In a statement yesterday, SC noted it has dismissed the review applications by the chemical group and related parties for failure to inform the SC of material developments prior to its listing in 2017. The related parties are Lotte’s executive directors, Lee Dong Woo and Lee Kwan Ho, reporting accountant Ernst & Young (EY) and the principal adviser to the listing exercise,  Maybank Investment Bank Bhd. SC also maintained its directive for EY and Maybank IB to conduct a comprehensive review and assessment of their policies and processes related to their roles as reporting accountant and principal adviser respectively. Both EY and Maybank IB have submitted their respective reviews and assessments of their policies and processes related to their roles, the SC noted stated. Lotte Chemical’s independent non-executive directors, Tan Sri Abdul Rahman Mamat, Tan Sri Datuk Dr Rafiah Salim and Ang Ah Lek’s reprimands were set aside. Non-independent non-executive director, Cho Seongtaeg’s, application for review is still pending.
 
Crescendo acquires freehold land in JB for RM13m
Crescendo Corp Bhd’s wholly-owned subsidiary, Crescendo Education Sdn Bhd, has acquired a freehold land in Johor Bahru from Panoramic Housing Development Sdn Bhd for RM13 million cash. In an exchange filing yesterday, Crescendo noted it intends to use to the land to develop apartments to rent to Crescendo International College’s students. The company added the acquisition will strengthen the group’s position in the education business and contribute to long-term profitability of its core business activities which are property development and building construction. The acquisition is expected to be completed by the first quarter of 2019.
 
CIMB estimated to record RM200m gain on disposal of its Malaysia stockbroking business into Jupiter Securities
CIMB Group Holdings Bhd is estimated to record a gain on disposal of RM200 million following the transfer of its Malaysia stockbroking business into Jupiter Securities Sdn Bhd. The transfer will entail, among others, the sale of CIMB Investment Bank Bhd’s (CIMB IB) cash equities business to Jupiter Securities; sale of CIMB Bank Bh’s equity financing services business and share margin financing granted in connection with the cash equities business to Jupiter Securities and sale of CIMB IB’s 100% equity interest in CIMB Futures Sdn Bhd to Jupiter Securities. In an exchange filing yesterday, the banking group noted the expected gain on disposal was arrived after taking into account the premium on the disposal of RM433 million and goodwill attributable to the business. The parties will proceed with the necessary process for the transaction following the signing of share subscription agreement between CIMB Group Sdn Bhd and China Galaxy International Financial Holdings Ltd, for the subscription of new shares CGS-CIMB Holdings Sdn Bhd. Jupiter Securities is a 100%-owned subsidiary of the Malaysia JV entity and will be the operating company for the stockbroking business of the CGS-CIMB joint venture in Malaysia. Upon completion of the proposed share subscription in CGS-CIMB and the proposed business transfer to Jupiter Securities, it will be renamed as CGS-CIMB Securities Sdn Bhd. The consideration for the proposed business transfer will be satisfied in cash and was determined based on the future prospects and net asset value of the in-scope business as at Dec 31, 2015, which amounted to RM565.6 million. Both proposals are expected to be completed in the first half of 2019.
 
Transocean acquires 77.20% equity in Swift for RM750m
Transocean Holdings Bhd has entered into a heads of agreement (HoA) with some shareholders of Swift Haulage Sdn Bhd and its subsidiaries to acquire a 77.20% stake in Swift for RM750 million. In an exchange filing yesterday, Transocean noted the purchase will be satisfied entirely with the issuance of new ordinary Transocean shares at an issue price of RM1.50 each. The shareholders of Swift who have agreed to the deal include Kenanga Nominees (Tempatan) Sdn Bhd, Persada Bina Sdn Bhd, Laserforms Sdn Bhd, Angka Dayamas Sdn Bhd, Bluefin Bidco Limited, Glory Portfolio Sdn Bhd, and Ng Chee Kin. Swift is logistics group. Both parties shall during the term of the HOA be given the opportunity to review and to conduct due diligence on each other for a period of three years prior, the filing stated. 
 
FGV inks MoU with CMEC
FGV Holdings Bhd (FGV) has signed a memorandum of understanding (MoU) with China Machinery Engineering Corp (CMEC) with the aim to explore the feasibility of a joint venture or other collaborations that primarily involve the establishment of paper pulp production facilities which will use waste from FGV oil mills as raw material  as well as the potential distribution and commercialisation of the paper pulp business to the global market. FGV’s interim group president and CEO, Datuk Wira Azhar Abdul Hamid, said given the volatility of crude palm oil prices, this initiative is in line with FGV’s strategy to focus on downstream activities to make sure the company fully utilises the by-products from its existing operations to create value for the group. FGV produces 3.47 million tonnes of empty fruit bunches per year from its 68 mills all over Malaysia. This green project aligns with its waste to wealth initiative to ensure its operations are more sustainable, the group stated. With this MoU, FGV hopes to explore the opportunity to integrate the operations of its existing mills with CMEC’s engineering expertise, to establish the paper pulp production facilities with an initial capacity of 50,000 MT per annum (1st phase). FGV wants to leverage on CMEC’s extensive engineering and domestic knowledge on China’s pulp market Azhar said in a statement yesterday. The MoU shall remain valid for two years.

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