Suiwah’s main shareholder bids to take company private

The Penang-based company notes it has received a letter from SHSB and PACs of their intention to privatise the company


Suiwah Corp Bhd’s major shareholder, Suiwah Holdings Sdn Bhd (SHSB), has proposed to take the company private via a selective capital reduction (SCR) and repayment exercise priced at RM2.80 per share.

The stock was last traded at RM2.18 last Thursday before it was suspended. The stock will resume trading at 9am today.

In an exchange filing last Friday, the Penang-based supermarket and department store operator noted it has received a letter from SHSB and parties acting in concert (PACs) that notified Suiwah of their intention to privatise the company.

The privatisation plan comes as Suiwah shares have been thinly traded, recording an average daily trading volume (ADTV) and average monthly trading volume of 15,456 shares and 160,067 shares respectively for the past two years, which represent 0.07% and 0.77% of Suiwah’s total free float.

“The listing status of Suiwah brings minimal benefit to the group and its shareholders. Suiwah has not undertaken any major corporate exercise or fundraising activities through the capital market for the past 10 years and has relied entirely on internally generated funds and/or bank borrowings to maintain and grow its operations.

“The privatisation of Suiwah by way of the proposed SCR would also provide greater flexibility to Suiwah in managing and developing the existing businesses of Suiwah without the regulatory restrictions and cost associated with being listed on Bursa Malaysia Securities Bhd,” the filing noted.

Pursuant to the proposed SCR, the entitled shareholders who own 39.55 million Suiwah shares will receive a total capital repayment of RM110.75 million, or RM2.80 per share.

As at Jan 24, Suiwah’s share capital is RM74.93 million, after the reclassification of share premium to share capital comprising 61 million shares.

Accordingly, the issued share capital of Suiwah will be reduced by up to RM110.75 million under the SCR.

In view that the capital reduction of the proposed SCR is higher than the existing issued share capital of Suiwah, to facilitate the proposed SCR, a bonus issue is proposed to be undertaken by Suiwah to increase the issued share capital of Suiwah up to a level which is sufficient for the capital reduction.

The proposed SCR will be funded by way of internally generated funds and/or financing facilities by banks.

The offer will remain open for the board’s acceptance until 5pm on Feb 11, 2019.

SHSB own a 20.97% stake in Suiwah, whose MD and major shareholder Datuk Hwang Thean Long is the ultimate offeror for the proposed SCR and holds a 7.76% stake in the company directly.

The PACs own a total 2.18% stake in the company and they include Hwang Shin Hung (1.15%), Hwang Siew Peng (0.86%), Suiwah Supermarket Sdn Bhd (0.12%) and Datin Cheah Gaik Huang (0.05%).