Milestones — be it embarking on a public share sale, securing term loan financing, liquidation or cashing out — mark the progress and learning curves of companies and their leaders

Loi Tuan Ee

Managing director, CEO and co-founder of Farm Fresh Bhd

Rarely does someone in his mid-forties leave a high-paying corporate job to start a business, let alone one that involves rearing cows without having the requisite experience.

The story of Farm Fresh Bhd founder Loi Tuan Ee is one to be remembered in Corporate Malaysia. Not only did he build a billion ringgit milk farming business from the ground up, more crucially, he changed Malaysia’s milk industry by proving that locals can make it big in this field.

In the past, the country relied heavily on imports to meet local demand for dairy products. As fresh milk was scarce, most of the milk products that were available locally were reconstituted milk, or made from powdered milk.

In 2005, at the age of 42, Loi resigned from his senior position at a packaging company he had worked at for 20 years to plunge into entrepreneurship. He started with goats and three years later, ventured into the dairy business after importing 60 Holstein cows from Australia and establishing Farm Fresh Milk Sdn Bhd.

Admittedly, some of Loi’s friends thought he was crazy to attempt such a business. But he proved that he was more than up to the task. Khazanah Nasional Bhd thought so as well and in 2011, the sovereign wealth fund agreed to invest to help Farm Fresh expand its operation in exchange for a 30% stake in the company.

The big break was a welcome one as Loi would have been the first to concede that the venture was risky — not only were bank loans difficult to obtain since dairy farms were not an established business at the time, rearing dairy cows in Malaysia’s tropical climate could also be challenging. Today, Farm Fresh has more than 10,000 cows across its six farms in Malaysia and Australia.

In any event, more than a decade after he became a dairy breeder, Loi and his siblings are ranked No 43 on Forbes Malaysia’s 50 richest 2022. And the fact that Farm Fresh is now a household name in the country is perhaps even more satisfying for the founder.

Farm Fresh’s initial public offering was one of the most anticipated, with a record 30 cornerstone investors and the shares allocated to retail investors oversubscribed by 13.5 times. The company raised RM1 billion on March 22, 2022, from its flotation exercise, the largest since July 2021. — By Intan Farhana Zainul

Liew Fook Meng

Co-founder of Cocoaland Holdings Bhd

Self-made confectionery tycoon Liew Fook Meng and his family concluded the sale of their collective 40.65% interest in Cocoaland Holdings Bhd — after three attempts to cash out in 2015 — to Main Market-listed Fraser & Neave Holdings Bhd (F&N) in November, entrusting the future of their candy empire to the second-largest shareholder of the company.

In June, it was announced that F&N, which held a 27.66% stake in Cocoaland, proposed to privatise the Rawang-based snack and candy maker at RM1.50 per share.

Controlled by Singapore-listed Fraser & Neave Ltd, F&N had proposed to acquire the remaining 72.34% stake in Cocoaland for RM488.15 million in cash in a deal that values the candy maker at RM686.4 million.

In the days before they established Cocoaland about four decades ago, the Liew brothers were small-time vendors for Apollo Food Holdings Bhd, Oriental Food Industries Holdings Bhd and Mamee-Double Decker (M) Sdn Bhd. At one point, the hard-working hawkers sold deep-fried snacks and banana fritters by the roadside in the Klang Valley.

Officially incorporated in 2000, Cocoaland was listed on the Second Board of Bursa Malaysia in 2005 before transferring to the Main Market a year later.

More than a decade ago in 2010, F&N acquired a 23% stake in Cocoaland for about RM55 million via a private placement after the Singapore-owned company had just lost the Coca-Cola bottling and distribution business.

In 2015, suitors knocked on Cocoaland’s door not once or twice, but thrice. In April of that year, the company entered into preliminary talks with Swedish private equity group EQT Partners to dispose of a controlling stake, though no firm offers were disclosed.

A month after the EQT discussions, Cocoaland received a takeover offer of RM377.52 million or RM2.20 per share from Navis Asia V11 Management Co Ltd. The board decided the offer was too low and rejected it.

The hat-trick of offers was to come a month later when Hong Kong-listed First Pacific offered to acquire Cocoaland’s entire business for RM2.70 per share or RM463.32 million in cash.

Wanting to retire, the founding members of the Liew family were ready to cash out to First Pacific, which is controlled by Chinese-Indonesian tycoon Anthoni Salim, also known as Liem Hong Sien, of the Salim Group. To the surprise of many, however, the deal was called off in July. Liew later disclosed that First Pacific had wanted him to stay on for a while, but Liew’s family members had agreed they would all leave at the same time.

In any event, it was an open secret that the co-founding brothers of Cocoaland were interested in letting go of the profitable business at the right price. With the completion of the acquisition on Nov 4, Cocoaland is now a wholly-owned subsidiary of F&N. Cocoaland was delisted from Bursa Malaysia on Nov 25. — By Liew Jia Teng

Kenneth Gerard Pereira

Managing director of Hibiscus Petroleum Bhd

Last month, two significant developments took place at Hibiscus Petroleum Bhd. The company received shareholder approval for a share buyback exercise and also secured term loan financing from a consortium of banks.

The share buyback marks a change for Hibiscus because, until 2018, the company was issuing equity and convertible instruments to raise money for its operations. Hibiscus, sitting on RM728 million in cash according to its latest results, is now looking at share buyback exercises to enhance shareholder value.

The company’s clinching of its maiden long-term financing amounting to US$120 million (RM530.9 million) also represents a breakthrough for its 64-year-old founder, Kenneth Pereira, as he has managed to persuade banks to extend long-term financing to the minor player in the upstream segment of the oil and gas (O&G) industry.

The early years after its listing in July 2011 were difficult for Hibiscus because it invested in oilfields that were relatively cheap but risky. The ventures into the risky oilfields did not produce results, and it was not long before the company had to go knocking on the doors of banks to seek financing. Financial institutions stayed away, however, given the nature of the company’s business in the upstream segment, which pushed Hibiscus to start issuing equity and convertible instruments to stay afloat.

Finally, a break came in March 2016, when Hibiscus completed the acquisition of a 50% stake in the Anasuria Cluster in the North Sea — a producing oilfield that gave Hibiscus immediate cash flow. Two years later, the group acquired Shell Malaysia’s oilfields in Sabah and Sarawak.

In January, Hibiscus completed the acquisition of Repsol assets for US$212 million in cash. The Repsol acquisition, which came with five operating oilfields in Malaysia and Vietnam, tripled Hibiscus’ production.

Bucking the trend, Hibiscus managed to secure its first long-term financing in an environment in which financial institutions are wary of lending to the O&G sector, owing to the massive debt blowouts at Sapura Energy Bhd and Serba Dinamik Bhd.

It remains to be seen whether the banking system will continue to lend support to Hibiscus in 2023. — By M Shanmugam

Tan Sri Lim Kok Thay

Chairman and CEO of Genting Bhd

Genting Bhd group president and CEO Tan Sri Lim Kok Thay started the year on a low note. His passion for cruise ships took a major hit with the liquidation of Genting Hong Kong Ltd, a major casualty of wide-ranging and persistent Covid-19 curbs.

A loan facility amounting to US$88 million for its shipyards in Germany fell through, triggering a cross-default on Genting Hong Kong’s other loan obligations of US$2.8 billion. On Jan 18, Genting Hong Kong’s shares were suspended and subsequently, the Lim family placed it under voluntary liquidation to see through an orderly disposal of assets to pay off creditors.

The asset disposal is ongoing, with most of the luxury cruise ships being either scrapped or sold. The amount recovered from the asset disposal cannot be determined yet, as Genting Hong Kong has yet to release its financial statements following the suspension of its shares.

Although it is no longer operating in Hong Kong, the Lim family still has interest in the cruise business, operating under privately held Resorts World Cruises, which is based in Singapore. Resorts World Cruises operates a luxury vessel, Genting Dream, which is leased from a group of banks in China.

Fortunately for other companies in the Genting group, the cruise business is directly held by the Lim family. So, the financial problems of Genting Hong Kong have had little impact so far on the operations of Genting, Genting Malaysia Bhd and Genting Singapore Ltd.

Genting Malaysia finally opened its outdoor theme park in February while Genting Singapore has set its sights on new casino licences issued in Japan.

Via Genting Malaysia, the group also submitted a bid but failed to obtain one of the six licences up for renewal in Macau. At the same time, it injected more money into loss- making Empire Resorts Inc in a deal that has not been well received by analysts. Under the deal, Genting Malaysia essentially acquired convertible preference shares from an entity controlled by the Lim family.

How Lim, 71, plans to chart the group’s fortunes in the US will be closely watched next year. A listing of Genting group’s US operations would reduce its debts and put the group on a stronger footing. — By M Shanmugam