Wednesday, February 23, 2011

MPHB ... Feb11

Its move to acquire the remaining 49% stake in Magnum Holdings Sdn Bhd may be a prelude to more corporate exercises within the group. These may potentially generate more interest in the stock, which had been quiet over the past three years.

MPHB had said that after taking full control of its crown jewel in Magnum, it would embark on divesting or unlocking the value of its non-core assets such as landbank as well as financial services operations. Such an exercise is expected to attract attention to the group after a three-year lull in corporate exercises since it privatised Magnum in 2007.

MPHB indicated in its announcement to Bursa Malaysia that it would focus on its gaming operations going forward, and the company plans to divest its non-core assets.

Apart from gaming, the group’s diversified portfolio includes financial services, stockbroking, hospitality, as well as real estate and property development.

The financial services unit is undertaken via Multi-Purpose Insurans Bhd, while the stockbroking comes under A A Anthony Securities Sdn Bhd.

MPHB, which owns the Multi Purpose Tower along Jalan Munshi Abdullah in Kuala Lumpur, undertakes its hospitality business under Flamingo Hotels and Management Services. In terms of property development activities, MPHB had in July last year signed three memoranda of understanding with Bandar Raya Developments Bhd as initial arrangements for joint ventures in real estate development on tracts owned by the group.

These include 107ha, and 130ha within Rawang and Gombak respectively in Selangor, besides another 32ha in Penang.

MPHB planned to raise some RM1 billion from the disposal of its non-core assets.

Estimates show that combined proceeds from MPHB’s asset divestment and land development come to RM2.2 billion.

MPHB’s large landbank might be jointly developed with other developers.

As at Sept 30, 2010, MPHB had a cash pile of RM764.81 million versus RM2.66 billion worth of debt obligations. This translates into a net debt of RM1.9 billion or net gearing of 0.8 times based on shareholders’ equity of RM2.29 billion.

Gaming operations made up 92% of MPHB’s revenue of RM2.71 billion during the nine months ended Sept 30, 2010.

MPHB’s corporate developments will be closely watched by in the investment fraternity in the coming months.

No comments: