Mulpha to raise RM21m

Mulpha International (Mulpha), an old horse of the Bursa, expects the listing of its subsidiary, Manta Holdings Co Ltd (MHCL), on the main board of Stock Exchange of Hong Kong Ltd in July to raise HK$50mil (RM21.2mil)
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CEO Chung Tze Hien said the funds raised would help MHCL expand its crane business.

“The listing status allows the MHCL group to have greater financial flexibility when pursuing its growth plans,” he told reporters after Mulpha International’s AGM and EGM yesterday.

There are four companies under the MHCL group - Manta Engineering and Equipment Co Ltd, Manta Equipment Rental Co Ltd, Manta Equipment Services Ltd and Manta Equipment (S) Pte Ltd.

Period	High	Low
Prices 1 Month	0.430 (17 June)	0.390 (17 June)
Prices 3 Months	0.525 (30-Apr-10)	0.390 (17-Jun-10)
Prices 12 Months	0.585 (14-Aug-09)	0.390 (17-Jun-10)
Volume 12 Months	282,099 (28-Jan-10)	2,375 (24-Dec-09)

The companies all serve the crane business, from sale and leasing to servicing of crane-related construction equipment.

Chung said proceeds from the listing exercise would be used to purchase tower cranes and construction equipment for rental purposes, general working capital, expansion and improvement of storage facilities, service and maintenance workshops. 

He said there was continued strong demand for cranes, especially from the Hong Kong, China and Singapore construction sectors.

Currently, Mulpha International owns 88% of MHCL, while the balance is held by Pan Ocean International.

“Upon MHCL being listed, the 12% held by Pan Ocean would be acquired by Mulpha International,” Chung said.

On the impact of MHCL’s expansion plans on Mulpha International, he said MHCL’s current earnings contribution to the group was not substantial. “But, with MHCL’s planned business expansion going forward, the contributions to the group could be more significant.”
As part of the proposed listing, Mulpha International will undertake an internal restructuring and re-organisation exercise following which it would issue 50 million new MHCL shares, representing 25% of the enlarged issued and paid-up share capital of the company.

The new shares would comprise five million issue shares that would be made to the Hong Kong public and 45 million shares to professional, institutional and other investors.

None of the directors of Mulpha International and MHCL group would be offered shares in MHCL pursuant to the proposed listing.

Chung said the group was confident its financial performance would be better this year.

On the reason for Mulpha Land Bhd’s par value reduction exercise, Chung said it would place the company in a better position to raise capital.

“The exercise allows us to raise capital when conditions are more favourable. There is a misperception that a par value reduction exercise is negative. In fact, there is now a trend for companies in the developed world to have a low par value or not at all,” he said.

Mulpha Land lowered its par value from RM1 to 10 sen.

“A lower par value will make it easier for Mulpha Land to go to the market to raise funds. It is also not possible to raise new shares at below par value,” he noted, adding that the exercise would not result in any adjustment to the share price of Mulpha Land or the number of shares held by shareholders.

He said the exercise would give rise to a credit of RM82.19mil which would be offset against Mulpha Land’s accumulated losses, and the balance credited to its capital reserves.

Mulpha International has a 55.56% stake in Mulpha Land.