MMC Corp to be privatised via SCR for RM2.9b

The fully cash exercise provides greater flexibility to MMC in developing its existing business while exploring opportunities


MMC Corp Bhd’s controlling shareholder, Seaport Terminal (Johore) Sdn Bhd, plans to privatise the group via a selective capital reduction and repayment (SCR) exercise at RM2 per share. The offer price is at a premium of 53% or 70 sen above its last traded price of RM1.30.

As at May 28, 2021, the issued share capital of MMC was RM2.34 billion comprising 3.045 billion ordinary shares. Seaport Terminal currently holds 1.576 billion MMC shares or 51.76% of the conglomerate.

Businessman Tan Sri Syed Mokhtar Shah Syed Nor is the controlling shareholder of Seaport Terminal via Indra Cita Sdn Bhd.

Entitled shareholders will receive a total capital repayment of RM2.94 billion and MMC confirmed the proposed exercise will not fail because of insufficient financial capability and every entitled shareholder will be fully paid in cash.

“The privatisation is being undertaken as it provides greater flexibility to MMC in managing and developing its existing business while exploring opportunities without regulatory restrictions and compliance costs associated with its listing status,” Seaport Terminal director Syed Danial Syed Mokhtar Shah stated to the MMC board in a filing to the exchange yesterday.

He said the exercise would also provide entitled shareholders an opportunity to exit and realise their investments in MMC at a premium over its prevailing market price.

He said the proposed SCR is also undertaken due to investors unable to accord MMC a valuation in line with its assets, as the market price of MMC’s shares does not reflect the underlying value of its diversified business.

MMC’s board, save for Sharifah Sofia Syed Mokhtar Shah who is an interested director, will deliberate on the proposed SCR and decide on the next course of action, the filing noted.

The SCR offer price of RM2 takes into consideration the closing price and volume weighted average market price of MMC shares up to and including the latest predictable date which was May 28, 2021.

MMC’s earnings per share (EPS) and price to earnings ratio (PER) were also taken into consideration. For the financial year ended Dec 31, 2020, MMC’s earnings per share was 12 sen with a PER of 9.4968 times.

MMC’s major assets include the Port of Tanjung Pelepas, Johor Port, Penang Port and Northport in Klang. It also has stakes in gas supplier Gas Malaysia Bhd and independent power producer, Malakoff Corp Bhd.

MMC last traded at RM1.30 yesterday, giving it a market capitalisation of RM3.96 billion.