SKH (0060) - TMS seeks to redeploy funds
PETALING JAYA: Internet solutions provider The Media Shoppe Bhd, (TMS) which is diversifying into the property construction business, is seeking shareholders’ approval to use part of a rights issue meant for overseas expansion, for the purpose.
The company said in a stock exchange filing that shareholders would need to approve the redeployment of part of its rights issue amounting to RM12mil to partially fund the property development project in Terengganu and for future projects.
TMS acquired a construction outfit Super Kian Holdings Sdn Bhd (SKH) recently as part of the venture into the property business. SKH has been appointed the managing contractor for the east-coast project.
The company expects the new venture to contribute at least an additional 25% to its net profit.
TMS said it believed that the proposed diversification would contribute positively to the company’s future earnings and improve the financial position via additional revenue and earnings contribution from property construction and related activities.
“The board believes that the group has the capacity, capability and resources to diversify into property construction and its related business by capitalising on the competency and experience of the following key management personnel of SKH for the proposed diversification,” it said in a shareholders’ circular.
TMS said most of the company’s revenue was derived from sales of IT and ICT products, which had been adversely affected by intense competition.
Notes from the circular shows that SKH is currently working on the groundwork for the project in Terengganu with an estimated cost of RM151mil.
Besides using proceeds from the rights issue, the remaining costs will be funded via internally generated funds and bank borrowings.
The project is expected to yield an estimated gross profit of RM30mil over the management period. The project features two-storey shoplots and offices together with five blocks (660 units) of affordable apartment.
TMS completed the rights issue exercise on Jan 19, 2012 raising RM31.26mil and has utilised about RM19.26mil. The company is also seeking approval to change its name to SKH Consortium Bhd in an EGM, which has been scheduled for Jan 19.
http://www.thestar.com.my/business/business-news/2015/12/29/tms-seeks-to-redeploy-funds/
