Johari’s JAG Capital buys 32% controlling stake in KUB


JAG Capital Holdings Sdn Bhd, an investment holding company of former Second Finance Minister Datuk Seri Johari Abdul Ghani (picture), has emerged as the single largest shareholder in Umno-linked KUB Malaysia Bhd.

JAG Capital acquired 178.07 million shares or a 31.99% interest in KUB from Anchorscape Sdn Bhd last Friday in a deal valued at RM121.09 million or 68 sen a share, a 28.5 sen premium from the 39.5 sen closing price.

KUB had asked for the suspension of share trading yesterday, before announcing the change in shareholding and appointment of new board members.

News of Johari’s acquisition in KUB helped propel the share price of the company which had the Ministry of Finance Inc (MoF Inc) as one of its main shareholders just two years ago. MoF Inc sold a 22.5% stake in KUB, according to a filing in early June 2017.

KUB shares rose 5.5 sen or 13.92% higher at 45 sen, with 23.51 million shares traded yesterday following the news. The company is now valued at RM247.63 million.

The former Umno Titiwangsa MP confirmed the purchase of the almost 32% stake in KUB.

“It is just my private investment. I’m buying for future value,” Johari told The Malaysian Reserve in a text message when asked about the share purchase.

Johari’s JAG Capital also holds a 32.7% stake in CI Holdings Bhd, a company in which the businessman-turned- politician was the MD for 12 years before his appointment as the deputy finance minister in July 2015.

Following the acquisition, KUB also announced the appointment of Johari and Megat Joha Megat Abdul Rahman as the non-independent non-EDs of KUB effective yesterday.

Megat Joha is also the group MD of CI Holdings. He took over the position following Johari’s resignation in 2015.

The company also announced the resignation of Tunku Alizan Raja Muhammad Alias as the non-independent non-ED.

In an exchange filing yesterday, KUB noted that JAG Capital’s acquisition of 178.07 million shares in the company — representing a 31.99% stake — from Anchorscape.

Anchorscape, an Umno-related company, had a 52.17% stake in KUB. After the share sale, Anchorscape’s holding in KUB stood at 20.18%.

Anchorscape emerged as KUB’s largest shareholder in 2017 after exercising the call option agreement which was entered with MoF Inc.

The call option required MoF Inc to sell to Anchorscape over 125.47 million shares — representing a 22.5% stake in the company — for RM43.91 million cash or 35 sen per call option share, executed in June 2017.

KUB’s shares have been in the limelight and had seen active trading in the last few weeks.

For the financial year ended Dec 31, 2018 (FY18), KUB’s profit fell 96.36% to RM1.18 million from RM32.4 million recorded in 2017. Yearly revenue also decreased 10.14% to RM133.22 million in 2018 from the RM148.25 million recorded for 2017.

KUB said the energy sector will continue to be the leading revenue and earnings driver of the group in FY19.

However, the performance of the sector is expected to be challenging due to intense competition and escalating input costs, which will continue to exert pressure on the operating margins.

As for the agro sector, the group foresees an improvement in overall performance going forward — particularly with the expected uptrend in crop production in its Sabah estates and the absence of losses contributed by the plantation and mill in Mukah, Sarawak, which are currently classified as assets held for sale or discontinued operations.

KUB said the information and communications technology and power sectors will continue to aggressively bid for further sizeable contracts whenever the opportunity arises to enhance its orderbook and, at the same time, focus on the execution of existing projects.