Pelikan ... Aug09

Sources say it is close to acquiring an European listed firm involved in the stationery business as it steps up the group’s presence in the region.

The firms is one of Pelikan’s strong competitors in Europe. This acquisition comes after Pelikan aborted plans to buy two rival companies in China.

Talk has emerged that in the latest acquisition, Pelikan is only interested in taking over the stationery business of the firm and is not keen on keeping the latter’s assets.

With the acquisition, Pelikan will enhance its position in Europe. However, the cost of this latest acquisition is not known.

Industry observers view that a strategic purchase is in line with the growth strategy of Pelikan, which derives most of its revenue in Europe, with Germany accounting for half of the business.

It is likely to fund the acquisition via borrowings, given its small ash holdings. Its leverage ratio is relatively high at 0.7 times, hence a cash call is also a possibility and feasible as the stock market has rebounded.

It currently has six production plants and has built presence in 26 countries.

On the financial front, Pelikan registered a 66% decline in net profits to Rm8.02million for 1Q2009 ended March 2009..

As at March 31, 2009, its borrowings stood at Rm374 million while cash and shareholders’ fund were rm58.44 million and RM559 million respectively.

CEO Loo Hooi Keat is the biggest shareholder in the company with a 29.45% stake followed by LTAT at 28.16%.

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Pelikan Intl Corp Bhd ... Feb 2009