Multi Sports Holdings Ltd, one of China’s biggest manufacturers of shoe soles, is set to become one of the first two foreign companies to be listed directly on Bursa Malaysia.

When its shares are floated on the Malaysian bourse possibly in late July or early August this year, Multi Sports may also become the world’s first listed shoe sole manufacturer, said senior executives of AmInvestment Bank Bhd handling the share sale exercise.

“Multi Sports’ listing prospectus is expected to be out later this month or in July,” AmInvestment regional business director Tony Lim Tong Lee told Malaysian journalists during a visit to Multi Sports’ manufacturing facility here last Sunday.

The big plant with 1,900 workers is located in the Fujian province, widely recognised as China’s shoe capital and one of the world’s largest production sites for leather and sports shoes.

Coincidently, the other foreign company seeking to raise funds in Malaysia through an initial public offering (IPO) is also from the Fujian province, although it is uncertain when its listing is going to take place exactly, said AmInvestment Bank associate director for corporate planning Denis Lim.

Multi Sports was looking at raising some RM57.6 million from its IPO, Lim added.

Multi Sports’ factory is operated by wholly-owned Jinjiang Baixing Shoe Material Co Ltd. It produced about 22 million pairs of sports shoe soles in 2008 and is expected to churn around 25 million pairs this year.

“Jinjiang City is home to the highest concentration of famous sports shoe brands in China such as Li-Ning, 361, CBA and Q Sport,” said Multi Sports executive chairman Lin Huozhi, who founded the company in 1993 by producing rubber shoe soles with the help of two assistants.

“China accounted for some 40 per cent of the world’s sports shoe production in 2007, with Jinjiang City making up half of the country’s output,” Lin added.

Executive director Huang Wei Min said Multi Sports is one of the top five shoe soles suppliers in the province and derived more than 90 per cent of its revenue from some 300 customers there last year.

The company had generated steady revenues and profits over the past years, he said. From 2006 to 2008, it recorded an annual compounded average growth rate of 33.94 per cent in revenue and 37.84 per cent in net profit.

Revenue for 2008 alone rose to 385.31 million renminbi (about RM195.78 million) from 306.63 million renmimbi in 2007. Net profit was 92.18 renminbi (RM46.84 million) from 76.16 million renminbi (RM38.7 million) in 2007. “The listing will be a good platform to help us grow further,” Huang said.

Multi Sports will offer 57.6 million shares, or 16 per cent of its enlarged share capital, to the public under its IPO. Another 51 million shares, representing 14.17 per cent stake, will be privately placed for selected investors. Tentatively, eash share should be priced at a range of RM1.05 to RM1.15.

About RM30 million of the estimated proceeds of RM57.6 million will be used to help finance the construction of a new factory, Huang said.

Bursa Malaysia first IPO for 2009, SAMCHEM Holdings Bhd’s initial public offer (IPO) has been oversubscribed by 18.1 times.

In a statement today, managing director Ng Thin Poh said the company was pleased with the positive take-up for the IPO in light of the challenging capital markets during the most part of the listing process.

“The encouraging response reflects not only the investors’ confidence in the group’s growth prospects but also their positive sentiment towards new listing,” he said.

Samchem, which would be listed on Bursa Malaysia on June 23, is the first IPO in Malaysia this year. The company received applications for 76 million shares against a planned maximum public issue of 6.8 million shares.

It said it planned to raise RM15.17 million with the issuance of 21.36 million new shares at 71 sen apiece.

Of the 21.36 million shares, 3.0 million shares were being sold to employees and directors, 3.42 million via private placement and 8.14 million placed with Bumiputera investors approved by the International Trade and Industry Ministry.

Samchem said of the RM15.17 million raised, RM8.17 million would be allocated for working capital, RM3 million for plant construction and acquisition of plant and machinery, RM500,000 for purchase of trucks and RM3.5 million to defray the listing expenses.

Samchem is an industrial chemicals distributor with presence in Malaysia, Vietnam, China and Indonesia. — Bernama

Malaysia Airline System Bhd (MAS) recorded a net loss of RM695 million in the first quarter of its financial year ending Dec 31 from a net profit of RM120 million in the corresponding period last year, mainly due to losses from fuel hedging contracts.

It posted an operating loss of RM138 million for the quarter from a profit of RM66 million a year ago.

In a filing with Bursa, MAS said the decline was in line with declining trend in global travel and cargo movements resulting from the current economic downturn.

The company’s revenue dropped to RM2.7 billion in the same quarter from RM3.6bil a year earlier.

MAS said the company reported a net loss for the quarter after including a derivative loss of RM557 million.

The company said its derivative loss consists of RM640.2 million in losses from fuel hedging contracts, RM80.5 million gains from foreign currency hedging contracts and a RM2.7 million gain from interest rate hedging contracts.

“The airline industry is being hit by the global credit crisis and the threat of outbreak of the Influenza A (H1N1) virus,” MAS said.

It added that for the second quarter of 2009, demand is expected to remain soft, being the low travel season period

The major shareholders of Kurnia Setia Bhd, TAS group and Pahang Agriculture Development Board (LKPP), have made an offer to acquire the entire business, including assets and liabilities of the company, for about RM270mil cash.

In a statement yesterday, plantation company Kurnia Setia said following the proposed sale of the business, it would carry out a capital repayment to all the shareholders by way of cancellation of Kurnia Setia shares in issue.

Its shareholders will receive cash of RM2.40 per share while warrant holders will receive 90 sen per warrant.

The offer was made via Kreatif Selaras Sdn Bhd, a special purpose private limited company incorporated for the acquisition.

An official letter has been submitted to the Kurnia Setia board, setting out the details of the offer, which lapses on June 18. Trading in Kurnia Setia shares was halted on June 3 pending this announcement. Trading will resume on Monday.

Kurnia Setia, which owns 14,000ha of oil palm estates in Pahang, last traded at RM2.20 while its warrants closed at 89 sen.

The purchase price of RM270mil is based on the outstanding shares of Kurnia Setia as at yesterday - 101.5 million outstanding shares and 1.8 million outstanding options under Kurnia Setia’s employees share option scheme, translating to cash of RM248mil.

Meanwhile, there are 24.6 million outstanding warrants that would translate to cash of RM22.1mil, assuming none of the warrant holders exercise their warrants between now and the acquisition completion date.

Kurnia Setia warrants have a 10-year exercise/conversion period, maturing on April 20, 2018 and were issued free to subscribers of Kurnia Setia’s rights issue.

TAS group and LKPP hold 30.5% and 22.8% in Kurnia Setia respectively while the remaining shares are held by the public.

Upon completion of the acquisition, the shareholders of Kreatif Selaras, would be LKPP and Transaksi Madani Sdn Bhd which will indirectly hold 22.8% and 77.2% in Kurnia Setia respectively.

(TAS group will be the shareholder of Transaksi upon completion of the deal).

Kreatif Selaras chairman Tengku Tan Sri Meriam Sultan Ahmad Shah said Kurnia Setia’s listing status had not accorded a fair value to the company over the years as a result of the low daily trading volume.

“The acquisition gives minority shareholders an opportunity to exit and realise their investment at RM2.45 per share - that is the RM2.40 offer price and five sen dividend to be paid,” she said.

The company paid an interim dividend of 10 sen per share for its financial year ended Dec 31 and declared a final dividend of five sen per share, payable on Aug 3.

The cash consideration of RM2.40 per share and 90 sen per warrant for the proposed acquisition was arrived at after taking into account the performance of the average market price of Kurnia Setia shares over the past three years and earnings outlook for the company, which is mainly derived from sale of fresh fruit bunches.`

Proton Holdings Bhd yesterday announced a net loss of RM341.5mil for its fourth quarter ended March 31 as write-downs and impairments dragged down the company’s financial performance that has already been hurt by a slowdown in sales.

Group chairman Datuk Mohd Nadzmi Mohd Salleh said Proton’s performance reflected the current global economic condition.

“The softening of the automotive industry arising from the global financial crisis had also adversely affected the performance of the group in the second half of the financial year,” he said in a statement.

For the fourth quarter, Proton posted an 18.4% drop in revenue to RM1.4bil and net profit swung into the red with a loss of RM341.5mil from a profit of RM217.5mil.

“The main reason for the group loss was Proton’s decision for the impairment of property, plant and equipment (PPE) and inventory write-down for certain models impacted by volume contraction,” said Nadzmi.

“Additionally, the results for the second half of the financial year had also been adversely affected by the accelerated amortisation of certain dies and jigs as well as the increased costs of components and raw materials arising from higher foreign currency exchange rates, particularly, the Japanese yen and the US dollar,” he added.

The write-downs and provisions cost Proton RM360mil during the fourth quarter and the company also sold 34,490 cars compared with 40,903 in the same period last year.

Nadzmi added that Proton was now reassessing its production volume after the contraction in sales during the current economic times.

For this financial year, Proton is expected to receive a research and development grant from the Government under the National Automotive Policy amounting to RM81mil.

For the full year, Proton posted a net loss of RM320.3mil, or 58.3 sen a share, compared with a profit of RM184.6mil, or 33.6 sen a share.Revenue for the year rose to RM6.49bil from RM5.62bil previously.

Proton managing director Datuk Syed Zainal Abidin Syed Mohamed Tahir said Proton’s balance sheet remained healthy despite the loss and that cash reserves at the end of the quarter stood at RM899.5mil compared with RM1.17bil last year.

“As a fully fledged automotive company, we spent a substantial amount on the development of new models such as the Proton Exora and Lotus Evora during the year. While this had affected our cash reserves, we will be able to recover when the cars are sold,” said Syed Zainal.

The Proton Exora has received bookings totalling 11,000 units.

“The Exora has also given Proton the opportunity to tap into a new segment - the MPV segment, which has a lot of potential and could help improve Proton’s market share and overall volume growth,” he said.

“Following the success of the Exora in the domestic market, we are now planning to launch the MPV in the Indonesian market in July, which has a sizeable middle-class market and is predominantly an MPV market.”

Proton recently reached an agreement with Edaran Otomobil Nasional to rationalise its distribution network that will see the number of dealers reduced to 191 and service centres to 224.

The company said the exercise would allow it to have better branding and improve on its after-sales services.

In addition to expanding the local market, Proton has also put into place a strategic plan to focus on building its export markets.

“Besides having a strategic partnership with Zagross Khodro for the CKD (completely knocked down) assembly of the Wira and more recently the Gen.2 models in Iran, we have also entered into a business relationship with Youngman of China for the CBU supply of our Gen.2 and Persona models, which is sold and distributed in China under Youngman’s Europestar badge, potentially leading to CKD assembly operations,” said Syed Zainal.

“We are also finalising our India strategy by the end of the year and we are indeed excited with these prospects in making Proton cars available and more visible in the overseas markets as this will hopefully enhance our revenue,” he said.

He said exports to foreign markets were expected to improve in the future and represent a significant portion of Proton’s sales.

“In terms of volume, we are aiming at doubling our total sales volume by 2010, of which the bulk will be derived from the export markets,” he said.

According to Forbes Inc, the Kuok Group chairman Robert Kuok, who made his fortune trading sugar, retains his top spot among Malaysia’s richest people, whose collective wealth dropped after a slump in the stock market.

Kuok, 85, heads the 2009 Forbes Asia Malaysia Rich List with a net worth of US$9 billion, down from US$10 billion last year.

Ananda Krishnan, 71, owner of Malaysian wireless operator Maxis Communications Bhd, is the nation’s second richest person with US$7 billion.

Coming in third with US$3.2 billion is Lee Shin Cheng, chairman of IOI Corp, Malaysia’s second biggest palm oil producer by market value.

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Kuok and Krishnan are the two richest people in Southeast Asia, accounting for 44 per cent of the top 40’s wealth, Forbes said in a statement.

Malaysia has nine billionaires who are collectively worth US$30 billion, or 84 per cent of the total wealth amassed by the country’s top 40.

The total wealth of Malaysia’s 40 richest people fell 22 per cent to US$36 billion from US$46 billion last year, in line with the 21 per cent drop in the Kuala Lumpur Composite Index.

Berjaya Corp chairman Vincent Tan was the only Malaysian to have dropped out of the billionaire’s ranks after share prices in his companies declined. He takes the 10th spot on the list with a net worth of US$750 million. — Bloomberg