The company, MBM Resources Berhad (MBMR), a subsidiary of Med-Bumikar Mara Sdn Bhd (MBMSB), holds a 22.58% stake in Perodua.
In an interview with FMT, Azmi Abd Rahim, who represents one of the two Bumiputera shareholders of MBMSB, said he agreed with most analysts that UMW’s offer price is undervalued.
Earlier this month, UMW, which owns 38% of Perodua, made an offer of RM2.56 per share for MBMR, bringing the total value of the deal to an estimated RM1.1 billion.
But Azmi says this was way below MBMR’s net tangible assets (NTA) of RM3.68 per share.
Azmi’s family is one of the six founding families who are MBMSB minority shareholders, each family roughly holding an 11.6% share. The majority shareholder is Mara, which has a 30% stake.
He said despite MBMR’s recent troubles, the subsidiary is a real asset to MBMSB, noting that MBMR has been paying out “good” dividends to shareholders consistently since it was listed in 1995.
“It is only MBMR’s foray into the auto component manufacturing sector which turned out to be a disaster. The idea behind it was for it to complement other aspects of MBMR’s business.
“But our investments, particularly in OMI Alloy Sdn Bhd, which makes alloy wheels, was what cost us.”
He said OMI Alloy had resulted in MBMR incurring losses of RM410 million in 2016 and 2017.
Azmi said that MBMR managed to avert financial disaster due to profits from its traditional motor trading division and its investment in Perodua.
Now, with a new CEO, Nor Hadi Daud, at the helm of MBMR, Azmi said the company’s prospects look brighter again.
“Hadi has vast experience in the automotive sector, with previous stints in Naza and Perodua. He is the right man to get MBMR back on the right track.
Azmi said that MBMR’s stake in Perodua was extremely valuable, given the company’s track record and potential.
Perodua, Malaysia’s second national carmaker, has come a long way since it introduced the tiny Kancil in 1994, in a market then dominated by Proton.
In terms of sales, Perodua lagged behind Proton until 2006, a year after the game-changing Myvi entered the market.
Since then, Perodua has dominated the automotive market, with a market share of 40% as of January 2018.
This year, it aims to sell 209,000 vehicles, buoyed by the popularity of the new Myvi, which has already recorded 48,000 bookings to date.
“As the offer stands, it doesn’t benefit the shareholders of MBMSB and the minority shareholders of MBMR. Going forward, MBMR has huge potential to offer shareholders of MBMSB,” Azmi added.
Perodua opens bookings for new Myvi (and yes, it’s called Myvi)