By Jose Barrock
State controlled investment arm Khazanah Nasional Bhd has trimmed to three, the initial five shortlisted players vying to buy its 45.03 percent stake in Time Engineering Bhd (TEB), industry sources say.
The three – Censoft Holdings Bhd (formerly Century Software Holdings Bhd), My EG Services Bhd’s executive chairman Norraesah Mohamad who is partnering members of the Kedah state royal family, and Skali group which was previously known as Alam Teknorat Sdn Bhd and a company linked to businessman Tengku Farith Rithauddeen— will be required to make a binding bid on Friday, April 5, with the winner announced later in the month.
“Of the five, two have been knocked out…the remaining three will have to make a binding bid, after which a decision will be made (by Khazanah),” a source familiar with the details said.
The two companies that have been side-lined are Fask Capital Sdn Bhd (formerly known as The Royal Mint Exchange Sdn Bhd) which is controlled by Nik Mod Amin Nik Abd Majid, and a consortium of three bumiputra companies.
While Fask Capital could not be contacted, an executive of the consortium of bumiputra companies confirmed that they were out of the running for the block in TEB.
Most pundits are putting their money on either Censoft or the group linked to MyEG bagging the stake, but do not rule out Skali as well.
“They (Skali) may be the dark horse but you can’t write them off as yet, they are also well connected, and have obtained the requisite funding,” the source added.
Tengku Ahmad Rithauddeen
A check on the Companies Commission of Malaysia (CCM)’s indicates that Skali’s controlling shareholders are Tengku Ahmad Rithauddeen, the former minister of defence and Tengku Farith’s father, privately held VF Capital Sdn Bhd , Acif Resources Sdn Bhd and Airport Ventures Sdn Bhd among others.
Meanwhile Censoft which has its mainstay in financial management solutions was listed in January 2011 and is 57.27 per cent controlled by its managing director Samsul Husin and his partners, executive directors of the company Ameer Shaik Mydin, Tamil Selvan Durairaj and Ang Hsin Hsien.
Politically well-connected Norraesah meanwhile is a member of the Umno Supreme Council, and was appointed a Senator in 2005. She is on the board of KESM Industries Bhd, Ya Horng Electronic (M) Bhd, Adventa Bhd, Malaysian Genomics Resource Centre Bhd, ICapital.Biz Bhd and Utusan Melayu (Malaysia) Bhd, among others.
The three companies that have been shortlisted are keeping mum as there is a confidentiality agreement in play. KiniBiz understands that AmInvestment Bank is handling the merchant banking work for the sale of Khazanah’s block in TEB.
It is also likely that the bidders will be exempted from making a general offer for the rest of the shares after buying Khazanah’s controlling block of shares.
TEB ended trading last Friday at 28 sen, inching up half a sen. At its close on Friday, TEB had a market capitalisation of RM217.07 million meaning Khazanah’s bloc had a market value of RM97.75 million.
However as at end December last year, TEB’s net asset per share stood at a mere 13 sen, which is only about 46 percent of its trading price.
For its year ended December 2012, TEB suffered a net loss of RM7.78 million on the back of RM144.59 million in revenue.
As at end December last year, TEB had cash and cash equivalents amounting to RM78.76 million. On the other side of the balance sheet, TEB had long term debt commitments of RM48.89 million while short term debt commitments stood at RM18.5 million.
The clean balance sheet is a result of TEB selling off 626. 18 million shares, or 24.74% equity interest in TimedotCom Bhd, in August 2011. This sale raked in RM332 million for TEB, which was partly utilised to redeem the company’s outstanding loan stocks and accrued interest of RM262 million due to Bank Pembangunan, and settle debts.
Halim Saad
What the three bidders see in TEB is anyone’s guess. TEB was part of conglomerate Renong Bhd, once Malaysia’s most indebted company with more than RM30 billion in debts. Renong was controlled by Halim Saad, known to be a close associate of former finance minister Daim Zainuddin.
In 2001 the government took over Renong and its parent United Engineers (Malaysia) Bhd (UEM), which in turn owned 31 per cent of Renong, in what was perceived to be a bailout.
In its heyday Renong had as many as 14 listed companies under its stable, including TEB.
In October 2003, Renong transferred its ownership in TEB to UEM which had since morphed into UEM Group Bhd, a wholly-owned subsidiary of state investment arm Khazanah Nasional Bhd.
TEB’s main asset is Dagang Net Technologies Sdn Bhd in which it has 71.25 per cent equity interest. Dagang Net was awarded a five-year government contract to operate an electronic customs declaration value-added network and electronic permits for other government agencies in 2004. The company managed to secure a five year extension, meaning the concession will expire next year.
Other than Dagang Net, TEB also has an integrated enterprise centre business, which operates a data centre with an in-built, security operations centre offering secured private cloud computing managed services.
TEB has been without a chief executive officer since Steven Lim Kee Seng stepped down in November last year. Lim had been at the helm of TEB since May 2009.
You must be logged in to post a comment.