In a Bursa Malaysia filing today, BPlant confirmed that the three companies “mutually agreed” to terminate the strategic collaboration agreement (SCA) they inked on Aug 24.
Under the agreement, KLK was to acquire a 33% stake plus one share in BPlant, sealing the deal with a cash payment of RM1.15 billion.
KLK would also initiate a compulsory takeover bid to acquire shares of BPlant at RM1.55 per share to raise its shareholding to 65%, and subsequently delist the company. LTAT and Boustead would have held the remaining 35% upon completion of the exercise.
The deal’s completion deadline saw not one but two extensions stretching from Sept 11 to Sept 22, and then again to Oct 6 (this Friday).
“The board wishes to announce that the controlling shareholders of the company, BHB and LTAT, have informed (BPlant) that the condition precedent under the SCA will not be satisfied by the cut-off date of Oct 6, 2023 and accordingly, the parties to the SCA have agreed not to proceed with the proposed strategic collaboration,” BPlant said.
In a separate bourse filing, KLK said as a result of the termination, BHB shall return the deposit sum of RM229.15 million to KLK within 14 business days from today, or such other later date as may be agreed between the parties.
It added the termination of the SCA is not expected to have any material effect on the earnings, earnings per share, net assets, net assets per share, of the KLK Group for the financial year ending Sept 30, 2024.
KLK’s open market purchases
Prior to the termination, KLK had increased its equity interest in BPlant via a series of open market share acquisitions last Friday.
This was confirmed in a number of bourse filings by BPlant yesterday which revealed KLK had acquired a direct equity interest of 3.09% or 69.29 million shares, and an indirect or deemed interest of 33% or 739.19 million shares.
A back-of-the-envelope calculation based on last Friday’s closing price of RM1.46 suggests that KLK could have forked out about RM101.16 million for its 3.09% stake. The indirect interest of 33% would be worth approximately RM1.08 billion.
However, the bourse filings did not identify the identities of any of the sellers.
Controversial deal
The proposed deal has been shrouded in controversy since it was announced. Opposition members of Parliament (MPs) have used the proposed deal to criticise the unity government over the approval for KLK to purchase the 33% stake, arguing the deal may adversely affect Bumiputera interests.
Bersatu MP Wan Ahmad Fayhsal Wan Ahmad Kamal urged the government to explain the rationale for the proposed disposal to KLK.
The strong opposition to the proposed disposal may well have prompted a rethink by the various parties involved as well as in the corridors of power in Putrajaya.
Prime Minister Anwar Ibrahim announced on Monday that the ministry of finance has allocated RM300 million to assist LTAT address its liquidity challenges and is looking for a total of RM2 billion by end this year to save LTAT.
This funding is aimed at preventing further losses for LTAT, he was quoted as saying during the launch of the Felda Segalanya event in Teriang, Pahang.
The BPlant-KLK proposal came just months after LTAT took BHB private to accelerate the latter’s debt restructuring.
BPlant’s shares closed at RM1.27 prior to its suspension yesterday, valuing the group at RM2.8 billion while KLK was at RM21.48, giving it a market capitalisation of RM23.22 billion.
Their shares will resume trading tomorrow after two days of suspension from Tuesday.
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