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MTD Walker takeover bid: Malaysian company yet to sell its controlling stake
The Malaysian shareholder of MTD Walkers is yet to sell its 90.8 percent controlling stake of troubled construction company to Sri Lanka’s Anunine Holdings.
The Walkers share has been suspended from trading since February 13, 2019. No such controlling stake transaction took place between December 31 last year and that date, so MTD Capital Bhd of Malaysia is still the direct owner of that chunk. The business must take place through the Colombo Stock Exchange (CSE), a senior analyst said.
Anunine Holdings recently went public that it will buy the shares currently held by MTD Capital Bhd, thereby taking over MTD Walkers and its subsidiaries. The company inducted two “independent” directors into the Walkers board–Anunine Chairman Anurath Abeyratne and his son-in-law N.P. Chanaka Gayan Kalhara Hapuarachchi.
The newcomers took the place of two independent directors linked to Supreme Global Holdings–Kumaragewattage Sharm Viraj Fernando and Yogendraprasath Sathiyaseelan who joined the group at the end of December 2018. Both resigned after the Colombo Stock Exchange (CSE) rejected a bid by a company allied with Supreme Global to buy the Malaysian stake.
Supreme Pantel Investments Ltd is chaired by Supreme Global Holdings Chairman R M Manivannan. He recently informed the CSE that, after negotiations with MTD Capital Bhd, it was agreed that the controlling stake will be sold to Supreme Pantel for a consideration of US$ 9mn or Rs 10.64 per share (there are 152,183,583 shares with the Malaysian entity).
“However, we now need clarity on the “minimum floor price crossing” restriction of 5% below current trading price which may prevent us from successfully completing the transaction,” Mr Manivannan wrote to the CSE.
The CSE did not allow the Supreme Pantel transaction with MTD Capital Bhd to go ahead. It cited 6.3 of the Automated Trading Rules of the CSE which states that a “crossing” shall not take place at a price below five percent of the “closing price”.
Supreme Pantel was earlier known as S G H Investments (Pvt) Ltd, incorporated in October 2017. It was renamed only in December last year and earned a new director (in addition to Mr Manivannan) named Vijender Singh from Noida in Uttar Pradesh, India.
It is not known what price Anunine Holdings has agreed to pay for the controlling stake of MTD Walkers and whether the same rule would apply.
By the end of September 30 last year, MTD Walkers had Rs 4.2bn in long-term debt and Rs 23.6 billion in short-term borrowings. Around Rs 22bn is due from trade and other receivables. It has to receive Rs 6bn from the Urban Development Authority alone, for three completed housing development projects.