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发表于 2-4-2008 12:39 AM
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Windfall for Idaman from Idris SPV sale
Idaman Unggul Bhd may see a windfall from the disposal of its 100% stake in Lambang Pertama Sdn Bhd (LPSB), the special purpose vehicle that holds all of Idris Hydraulic (M) Bhd and its residual assets.
In a recent announcement, the insurance outfit said it has struck a deal with Sparkle Scheme Sdn Bhd to sell LPSB for a lump sum of RM410 million cash. Out of that amount, Idaman Unggul will likely pocket RM81.6 million for LPSB. It will also receive another RM100 million over a period of 10 years as settlement for a sum previously advanced to Idris. The remaining RM228.4 million from the proceeds will go towards redeeming all LPSB's outstanding loan stocks that are held by Idris' creditors.
Idaman Unggul has been trying to dispose of LPSB for some time. What is interesting is that the value of LPSB has been rising on the back of higher timber prices.
When the company first entered into a deal with Sparkle Scheme last December to dispose of LPSB, the sum bandied about was not more than RM247 million, out of which RM227 million would go towards the settlement of LPSB's loan stocks and the remainder of RM20 million for its stake in LPSB. The announcement did not mention the settling of advances owed by Idris to Idaman Unggul.
The deal lapsed in January, but by then, another buyer, Enika—MAA Sdn Bhd, had surfaced with a better offer. Enika—MAA was willing to fork out RM227 million to settle LPSB's outstanding loan stocks and pay RM73 million to Idaman Unggul for its stake in LPSB. It was also prepared to pay another RM100 million in instalments over 10 years to settle the sum owed by Idris.
The agreement with Enika—MAA lapsed last month, and in came Sparkle Scheme with a higher offer of RM410 million.
Idaman Unggul took over the listing status of Idris under a major exercise in 2003. Under the scheme, Idaman Unggul established LPSB which issued RM234 million of loan stocks to Idris' scheme creditors.
What draws buyers to LPSB is that it holds a timber concession for a tract covering 234,552ha of forest reserve in Sabah. With timber prices currently at record high, and LPSB's 100—year forest management concession, market observers say there is no shortage of interest in LPSB.
"Currently, the reserve of the forest concession is about 28.11 million cu m. There are no extraction rates or returns as no activities are being undertaken in the concession," says Idaman Unggul in the announcement detailing the deal with Sparkle Scheme.
According to Idaman Unggul, its cost of investment in LPSB is only RM2 (being LPSB's issued and paid—up capital). Being an SPV, LPSB's accounts, including its accumulated losses and others, were not consolidated into Idaman Unggul's accounts. Thus, any surpluses from the disposal will be a bonus to Idaman Unggul.
The fact that Idaman Unggul will pocket some RM81.6 million if the sale materialises, after the settlement of LPSB's outstanding loan stocks, is a windfall to the company. This is considering that its market capitalisation at 38 sen is only RM152 million.
In the announcement, Idaman Unggul says it will utilise the surplus proceeds from the sale to strengthen its core business in general insurance held under wholly—owned subsidiary Tahan Insurance Malaysia Bhd.
On a consolidated basis, Idaman Unggul posted a net profit of RM31.5 million for the financial year ended Dec 31, 2006, on a turnover of RM106.7 million. The profit was, however, achieved on the back of a disposal gain of RM86.9 million resulting from the sale of the group's life insurance business.
In July last year, Idaman Unggul sold the life insurance business under Tahan to AXA Affin Life Insurance Bhd for RM121 million cash. The sale realised a gain of some RM87 million for the group and raised cash to beef up the capital base of Tahan's general insurance business to meet regulatory requirements. A bigger capital base also means the general insurance arm can underwrite more businesses.
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