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MAINBOARD-LISTED Fu Yu Corporation Limited is intending to privatise its subsidiary, LCTH Corporation Berhard, through a selective capital repayment (SCR) exercise valued at around RM61.3 million (S$20.3 million).
In a bourse filing late Thursday, the manufacturer of precision plastic components in Asia said that the proposed SCR involves LCTH undertaking a selective capital reduction and a corresponding capital repayment in respect of the LCTH shares held by all shareholders of LCTH other than Fu Yu.
As at Dec 6, 2017, LCTH has a share capital of about RM170 million comprising 360 million ordinary shares. The group owns close to 255 million LCTH shares, representing an equity interest of 70.64 per cent, while the entitled shareholders hold nearly 106 million LCTH shares which represent about 29.36 per cent of the share capital of LCTH.
LCTH is listed on Bursa Malaysia Securities Berhad. The firm's principal business activities are precision manufacturing of tools and plastic products in Malaysia.
Pursuant to the proposed SCR, the entitled shareholders will receive a total capital repayment of RM61.3 million, which represents a cash repayment of RM0.58 for each LCTH share.
Fu Yu said that upon successful completion of the SCR, the 106 million LCTH shares held by entitled shareholders will be cancelled and LCTH will become a fully owned subsidiary of the group.
The SCR cash amount is 1.01 times the net asset value of LCTH, and represents a premium of 31.82 per cent over the last transacted market price of RM0.44 per share on Dec 6, and 25.98 per cent over the three-month volumeweighted average price of RM0.4604 per share.
The proposed SCR will be funded via the existing cash balance and internally generated funds of the LCTH group.
Fu Yu last closed at S$0.19 on Thursday, up 0.1 cent, or 0.5 per cent.