Equine Capital Bhd ....May 2008

It has seen an unusual shareholding change in privately held Jasa Lumayan Sdn Bhd’s disposal of an 8.2% stake in the company just three days after it acquired the shares.

According to a Bursa Malaysia filing, Jasa Lumayan sold the stake comprising 15.75 million shares in Equine Capital on April 24 2008, just three days after it emerged as a substantial shareholder following the acquisition of the stake.

The filing showed that Jasa Lumayan had bought the stake from Azim Raya Sdn Bhd, the vehicle of Long Ngah Mat Unah, on April 21 2008. It is not clear to whom Jasa Lumayan had sold the stake. The acquisition and disposal prices are not known.

However, there were two significant off-market trades for 6.8 million shares and another for 5.1 million shares, which crossed at 62 sen or for a total consideration of about RM7.4 million. Notably, the sale at 62 sen is a 19% discount to Equine’s close on Wednesday of 77 sen.

According to the Companies Commission of Malaysia, Jasa Lumayan was registered only on March 11 2008. The company’s two directors are, Wee Beng Aun, who has a 44% stake in Jasa Lumayan and Lee Kian Jin with 25%. Another shareholder of Jasa Lumayan controlling 30% is Suanto Ng.

The shareholding changes came on the back of Equine having been in the spotlight lately after its proposed RM20 billion Penang Global City Centre (PGCC) project was scrapped. Equine had a 25% stake in privately held Abad Naluri Sdn Bhd, the company given the mandate to develop the gargantuan project. The PGCC project was shelved after the opposition Pakatan Rakyat wrested control of Penang from the ruling coalition Barisan Nasional coalition in the last general election held early April 2008.

There have also been two resignations from the board of Equine on May 2008, with the departure of Australian national James Mackenzie Hall and Lim Eu Keong. The duo, were replaced by Datuk Hamzah Md Derus and Wong Kim Seng.

Equine’s controlling shareholder is Datuk Patrick Lim Soo Kit, who is also the company’s executive chairman. He controls 20.4% of Equine’s stock via his private vehicles Indera Muhibbah Sdn Bhd, Perharap Sdn Bhd and Temasya Permai Sdn Bhd.

There has also been a new substantial shareholders in Equine in the form of Smiling Sun Ltd, which is registered in the British Virgin Islands. Smiling Sun emerged as a substantial shareholder in late Jan 2008 with 5.4%. However, by March 2008, Smiling Sun had increased its stake to about 7.9%. The identity of Smiling Sun remains unclear.

Could it be that Lim is looking to cash out after the RM20 billion PGCC project failed to take off?

Company Financial Results …

For the nine months ended Dec 31, 2007, Equine suffered a net loss of RM3.7 million from almost RM70 million in revenue.

Equine’s assets are in its pockets of land located in Selangor, which collectively have a net book value of almost RM300 million, and another 450 acre plot of land ins Selberang Prai, Penang, which has a net book value og about Rm12.5 million.

According to its balance sheet, as at end 2007, Equine had a total debts of about Rm340 million. Meanwhile the company’s total assets amounted to Rm611.7 million.