DRB-HICOM unaware of plans to privatise it

It tells Bursa it’s not aware if Syed Mokhtar mulling privatising conglomerate

KUALA LUMPUR: DRB-HICOM Bhd yesterday announced it was not aware of any proposal to privatise the company after a report speculating such an action was being mulled by its controlling shareholder Tan Sri Syed Mokhtar Albukhary was published.

DRB-HICOM wishes to state that the company is not aware of such proposal nor have we received any notice whatsoever to that effect from our holding company, Etika Strategi Sdn Bhd, it said in reply to a query from Bursa Malaysia.

It was reported yesterday that Syed Mokhtar was considering privatising DRB-HICOM in a RM2bil exercise or between RM2.20 and RM2.70 a share. The report said he was being advised by Maybank Investment Bank Bhd.

Shares in DRB-HICOM Bhd rose marginally in the morning but closed down 5 sen at RM1.65 ahead of the statement by the company.

DRB-HICOM stock, however, has been rising steeply in recent days. Just this month alone, prior to the fall yesterday, the stock was up 28.8%.

For the past six months to its recent high on Wednesday, DRB-HICOM shares have appreciated by 66.7%.

The company is generally not tracked by analysts given the sprawling nature of its businesses that include primarily automobiles, property and services.

Recently, it announced net profit more than doubled to RM132.2mil for the second quarter ended Sept 30 compared with RM61.7mil in the previous corresponding period.

During the quarter, however, the company wrote back RM71.22mil in negative goodwill following the absorption of Edaran Otomobil Nasional Bhd as a wholly-owned subsidiary.

For the six months to end-September, DRB-HICOM's net profit improved 166% to RM290mil from RM109mil a year ago.

Its automotive business contributed RM1.84bil or 57.4% of the company's revenue for the six months under review, services contributed RM1.31bil or 40.9% while the property and infrastructure business earned RM53.9mil or 1.7%.

The company has announced plans for more balanced contribution from its divisions in the medium term as it rolls out strategies to improve the contribution of its services, which includes Bank Muamalat and concessions such as Alam Flora and Puspakom, and property arms.

In terms of immediate new businesses, the group had said it expected negotiations with Volkswagen AG regarding assembling cars at its Pekan automotive complex to be completed this month.

Regional distribution is part of the deal with Volkswagen and the group is also looking at hybrid and electric cars with the German auto giant. (The Star Online)