Weida Bhd ... Feb 2009

Weida (M) Bhd, a company specialising in utilities infrastructure, has bought more shares in Mutiara Goodyear Development Bhd in order to “diversify from its current business direction”.

Weida had purchased, through a placement exercise, 7.22 million shares or a 3.12% stake in Mutiara for RM4.98 million cash. The purchase was made on top of an earlier acquisition, made on Nov 4, 2008 when Weida bought 6.49 million Mutiara shares (2.81% of shareholding) for RM5.13 million.

Both purchases were made through internally generated funds and borrowings.
The two recent purchases, though small, could reinforce Weida’s status as a substantial shareholder in Mutiara due to the latter’s loose shareholdings structure.

As at Sept 3, 2008, the company’s largest shareholder was HSBC Nominees (Asing) Sdn Bhd with 12.2% stake followed by Laman Ariff Sdn Bhd (8.66%).

The Mutiara purchase would enable the company to diversify and “venture into property development business”.

The investment provides a beneficial progression by Weida to extend and consolidate its shareholdings in Mutiara in order to reap the benefit from future development projects of Mutiara.

The investment would help diversify the source of its earnings. The company will be able to mitigate the risk of focusing its business on water and sewerage industry, and widen its business horizon.

Contributions from Mutiara to Weida in the future are expected to complement Weida’s current earnings.