KUALA LUMPUR (Nov 10): Based on corporate announcements and news flow today, companies in focus on Thursday (Feb 2), may include: Hua Yang Bhd, EKA Noodles Bhd, Petronas Dagangan Bhd, Esthetics International Group Bhd (EIG), CME Group Bhd, DRB-Hicom Bhd and Shell Refining Co (Federation of Malaya) Bhd.

Property developer Hua Yang Bhd expects its northern region projects to contribute up to 30% to its revenue for its financial year ending March 31, 2018 (FY18).

"We hope to generate sales revenue of up to RM100 million for FY17 from our projects in the northern region, including two developments in Seri Iskandar, Perak," said the group's assistant general manager Tony Ng.

Its maiden project in Penang, the Meritus Residensi in Prai, is projected to generate sales revenue of RM40 million to RM50 million in FY17, and up to RM100 million in FY18, he added.
 
At the launch of the RM220 million gross development value (GDV) project, Ng said it has seen a 34% take-up rate, made up mostly of first-time homebuyers, since the soft launch earlier this year. He expects the rate to rise to 50% by the end of March.

EKA Noodles Bhd said the requisition for its Feb 6 extraordinary general meeting (EGM) has been withdrawn.

In a bourse filing, the vermicelli manufacturer said it received a letter today from shareholders Law Chong Kai, Fong Yit Meng and Vibrant Class Sdn Bhd notifying the company of the withdrawal of the EGM notice and its related resolutions.

"Following thereto, the board of directors will evaluate the necessity, feasibility and compliance of the EGM to be convened by the company at 9am on Feb 6, 2017," the group said.

EKA did not mention the reason for the withdrawal. Recall that group had on Jan 9 agreed to the EGM, but nevertheless engaged legal advice on the notice, which it claimed was "invalid and "irregular".

Loss-making EKA entered Practice Note 17 status on Sept 1, 2016 after failing to return to the black since Sept 30, 2013. Just earlier this month, it ceased operations at two subisidiaries, and sold off all assets in one of the two companies to reduce its liabilities.

Petronas Dagangan Bhd’s plan to divest its 100% interest in Vietnam-based Thang Long LPG Company Ltd has hit a roadblock.

This follows Totalgaz Vietnam LLC’s decision to terminate the purchase of the stake held by Petronas Dagangan’s wholly-owned unit PDB (Netherlands) B.V.

“We wish to inform that Totalgaz Vietnam has issued a notice to terminate the sales and purchase agreement (SPA) effective from Jan 31, 2017,” Petronas Dagangan said in a bourse filing, without specifying the reason for the termination.

“The termination of the SPA is not expected to have any material effect on Petronas Dagangan’s financial position,” said Petronas’ domestic marketing arm, which operates more than 1,000 retail petrol stations in Malaysia.

Petronas Dagangan had said in its 2015 annual report that the planned divestment of its 100% stake in Thang Long was part of its portfolio rationalisation strategy as it grappled with changing market conditions.

It is worth noting that while Petronas Dagangan has failed to sell off Thang Long, it managed to sell another unit, Petronas (Vietnam) Co Ltd, to Totalgaz Vietnam.

Petronas Dagangan ventured into the liquefied petroleum gas business in Vietnam and the Philippines back in 2002 as it aimed to diversify its revenue and earnings base through geographical expansion in the liquefied petroleum gas business.

Esthetics International Group Bhd (EIG) has announced that it has inked a distribution agreement with Frostbland Pty Ltd for the right to sell and distribute Clinelle skin care products in Australia, New Zealand and the South Pacific Islands.

In a statement today, EIG said the five-year contract starts from March 1 this year till Feb 28, 2022 and was signed between EIG Pharma Asia Sdn Bhd (EIGP) and Frostbland with the option to renew for another five years until Feb 28, 2027.

“It will enable EIG to further expand its distribution of Clinelle, which refers to EIG’s wholly-owned fast-moving consumer goods (FMCG) brand of skin care products through the FMCG channel in Australia, New Zealand and the South Pacific Islands,” it said.

According to EIG, Frostbland is one of the leaders in marketing and distributing skincare and beauty products through the FMCG channel throughout Australia, New Zealand and the South Pacific Islands.

CME Group Bhd’s associate CME Properties (Australia) Pty Ltd (CMEPA) has agreed to pay more than A$3.7 million (RM12.4 million) in settlement to Prime Capital Securities Pty Ltd, marking the end of a legal ordeal between the two Australian companies.

The two companies signed a deed of forbearance, which requires CMEPA to pay Prime Capital the settlement before July 31, CME Group said in a bourse filing.

“The deed will not have material financial impact to the company for the financial year ended Dec 31, 2017, as the settlement sum has been provided and accounted for in the financial year ended Dec 31, 2015 and 2016,” CME Group said.

To recap, Prime Capital issued a winding-up application to CMEPA in August 2016, for a failed repayment of A$2.5 million mortgage loan meant for a mixed-use development in Mandurah, West Australia.

CMEPA subsequently received A$2.11 million in settlement from its partner for the development project, Raurk No 11 Pty Ltd, for spending the loan without CMEPA’s approval.

DRB-Hicom Bhd announced the internal restructuring of its auto units including the sale of its loss-making emergency roadside assistance business Multi Automotive Service and Assist Sdn Bhd (MASA) for RM1 to Vikneswaran Suppiah who is the operation manager of MASA.

MASA is wholly owned by Edaran Otomobil Nasional Bhd (EON), which is an indirect wholly-owned subsidiary of DRB-Hicom.

The sum was arrived based on a willing buyer-willing seller basis after considering the unaudited shareholders’ deficit of RM180,000 as at Dec 31, 2016 and net loss of RM660,000 in MASA for its nine-month period ended Dec 31, 2016.

The sale is in line with DRB-Hicom’s intention to streamline its operations by divesting insignificant businesses and to focus on its core businesses.

Meanwhile, also part of its internal reorganisation, DRB-Hicom’s wholly-owned unit PHN Industry Sdn Bhd has acquired Oriental Summit Industries Sdn Bhd (OSI) for RM23.9 million from Hicom Holdings Bhd (HHB).

DRB-Hicom said the acquisition would enable the streamlining of common manufacturing activities undertaken by PHN and OSI.

The activities to be streamlined include metal stamping, welding and sub-assembly of metal components resulting in potential cost savings for the DRB-HICOM group.

The group also said EON would dispose of its 100% interest in DRB-Hicom Leasing Sdn Bhd (DLSB) to DRB-Hicom EZ-Drive Sdn Bhd for RM14.97 million, which is based on DLSB’s unaudited tangible assets on Aug 31, 2016.

The consideration of RM14.97 million will be satisfied by the issuance of new shares in EZ-Drive to EON. DLSB and EZ-Drive are wholly-owned subsidiaries of EON, which is a wholly-owned unit of HHB.

EZ-Drive is the franchise holder of the AVIS brand in Malaysia and operates short-term leasing, long-term leasing and retail car rental business.

“Upon completion of the proposed internal reorganisation, DLSB will become a wholly-owned subsidiary company of EZ-Drive,” DRB-Hicom said.

The reorganisation will enable EON to consolidate its vehicle rental and leasing business under one roof to achieve greater operational efficiency and cost savings, contributing positively to DRB-Hicom’s future earnings, the filing said on the rationale for the exercise.

Shell Refining Co (Federation of Malaya) Bhd (SRC)’s shareholders have largely rejected the unconditional takeover offer of RM1.92 a share from Malaysian Hengyuan International Ltd (MHIL), following the advice to do so from independent adviser AmInvestment Bank.

In a bourse filing, SRC said MHIL has received only 0.02% acceptances to its offer at the close of the offer today (Jan 31), bringing the stake owned by MIHL in the company, together with persons acting in concert with it, to 51.02%.

The ultimate owner of MHIL is China's Shandong Hengyuan Petrochemical Co Ltd, which bought a 51% stake in SRC from Shell Overseas Holdings Ltd at RM1.92 in December last year.

The unconditional offer for the rest of the stake it does not own was made on Jan 9.

AmInvestment Bank had, in a circular to shareholders on Jan 19, described the offer as both unfair and unreasonable.

It said the offer was not fair as it, among others, represented a discount of between 53.8% and 59.6% to the fair value per SRC share — based on discounted cash flow valuation — of between RM4.16 and RM4.75 per share.

It also deemed the offer unreasonable as MHIL intended to upgrade SRC's refinery plant to meet the Euro 4M and Euro 5 fuel standards that would allow it to remain viable and continue as a going concern, besides strengthening SRC's position as a regional refined product supplier, which would be in the best interest of the shareholders of SRC.