KUALA LUMPUR (Aug 12): RedHot Media International Ltd (RHM) has ceased to be a substantial shareholder in PUC Bhd, eight years after it took over the listed outfit in 2011.

In a filing today, PUC announced that RHM’s stake in the company had been diluted following the private placement of 142.42 million shares in the company that was completed on Aug 10.

Prior to that, RHM held 25.47 million shares representing a 5.37% stake in PUC. That same stake has now shrunk to 4.13%.

It is unclear if a new substantial shareholder will emerge after the share placement.

RHM is the private vehicle for PUC managing director Cheong Chia Chou, who took over the helm from his late brother Cheong Chia Chieh in 2017.

RHM had acquired some 60% stake of PUC (then PUC Founder Bhd) by injecting its advertising subsidiaries for a value of RM95 million in 2011.

Taking over from Chia Chieh after his passing due to illness at the time, Chia Chou diverted from PUC’s initial venture into the solar power project business, and instead went big into digital — particularly omni-channel marketing solutions, e-commerce platforms with the brand name Presto, and fintech.

However the pivot took longer to materialise, with the group recording a massive loss of RM58.8 million in FY19 — due to write-off on assets and goodwill — on revenue of RM47.8 million.

The August private placement, which represents 30% of its share capital then, involved placement of 142.42 million shares at 12.96 sen apiece or RM18.46 million, funds of which is used to “upgrade and market” the Presto digital platform.

The placement share price represented a 10% discount to its five-day volume-weighted average price of 14.4 sen then.

In August, shares of PUC have climbed by 10 sen, or 69% from its July close of 14.5 sen. The counter last traded one sen or 3.92% lower at 24.5 sen, valuing the group at RM151.2 million.