Chin Hin triggers MGO after raising stake in SIB

PETALING JAYA: Chin Hin Group Bhd has proposed to acquire 4.77% or 30.29 million ordinary shares in Signature International Bhd (SIB) for RM25.4mil or 84 sen per share.

In a filing with Bursa Malaysia, Chin Hin said it has entered into conditional share sale agreements with Teoh Hai Hin and Por Teong Eng for the proposed acquisition.

As at Jan 16, 2024, Chin Hin and its persons acting in concert (PACs) hold an aggregate 182,295,000 ordinary shares in SIB, representing 28.72% equity interest in SIB.

Upon completion of the proposed acquisition, the aggregate shareholdings of Chin Hin and its PACs in SIB will increase from 28.72% to 33.49%.

Accordingly, Chin Hin will be obliged to extend a conditional mandatory general offer (MGO) for all the remaining SIB shares not already owned at a cash offer price of 84 sen per SIB share.

Additionally, Chin Hin said the company also proposes to undertake a proposed bonus issue of 1.77 billion new ordinary shares in Chin Hin on the basis of one bonus share for every one existing Chin Hin share (including treasury shares) held at an entitlement date to be determined and announced later.

As at the latest practicable date, the total issued ordinary capital of Chin Hin is RM381.9mil comprising 1.77 billion Chin Hin shares (including 750,300 treasury shares).

The proposed bonus issue which entails the issuance of 1.77 billion bonus shares, will result in an enlarged issued ordinary share capital of 3.54 billion Chin Hin shares.

Listed on the Main Market of Bursa Malaysia, SIB is mainly involved in design, product development, manufacturing, marketing and distribution of kitchen systems, wardrobe systems and built-in kitchen appliances as well as interior fit-out. Currently, SIB is an associate company of Chin Hin.

Chin Hin said it intends to maintain the listing status of SIB on the Main Market of Bursa Malaysia and the proposed acquisition shall be fully funded via the group’s internally generated funds.

Chin Hin said as the company realised its need to grow and evolve its product offerings within the building materials business, as well as providing a comprehensive product range within the property and home and living solutions segment, the group decided to embark on the acquisition of its current associate stake in SIB in March 2021.

Chin Hin is of the view that it is an opportune time to increase its stake in SIB as the latter’s prospects continue to be positive.

It added that further growth within SIB is also expected to be driven by the recently completed acquisitions of Corten, Areal, Fiamma Holdings Bhd and Zig Zag Builders (M) Sdn Bhd, which is expected to improve the financial performance of SIB going forward.

Nevertheless, Chin Hin remains cautiously optimistic that SIB will continue to grow its orderbook which will result in continuous improvement in SIB’s earnings moving forward.