Censof has no plan to increase stake in Time Engineering

Published: Saturday November 30, 2013 MYT 12:00:00 AM 

Updated: Saturday November 30, 2013 MYT 6:49:54 AM

BY LEONG HUNG YEE

PETALING JAYA: Censof Holdings Bhd, which has a 45% stake in Time Engineering Bhd (TEB), has no intention of increasing its stake and will be doing a lot more investor relations work to get investors to know TEB.

“We’re happy with the current stake and are not going to increase it. We would do more investor and public relations work. No analyst really covers TEB. We have a lot to do,” corporate services director Patrick Wong said after Censof’s EGM to approve its RM100mil worth of redeemable convertible notes (RCN).

He said TEB’s share price has been rather depressed. The shares have fallen some 27% over the past six months, closing at 26 sen.

Censof group managing director Datuk Samsul Husin said the company would be nominating new board members for TEB. It is understood that Censof will appoint four representatives from the company to join TEB.

On Thursday, TEB announced that Samsul, a nominee of Censof, had been redesignated as acting group managing director/CEO of TEB.

To recap, Censof had bought the TEB stake for 20 sen per share, or RM69.8mil, in September following Khazanah Nasional Bhd’s divestment of its entire stake in TEB.

Consequently, Censof had triggered a mandatory general offer, but the company had no intention of delisting TEB.

However, TEB shareholders were later advised not to accept the general offer. Independent adviser Public Invesment Bank Bhd, in a circular, deemed the offer of 20 sen per share as not fair and not reasonable based on a few methods of valuation.

Samsul had told StarBiz: “I believe we can do something with TEB or else we would not have taken the risk of buying the company.”

The risk Samsul was talking about involves the RM100mil worth of RCN which would be used to finance the deal.

Wong said the RCN was the country’s first hybrid instrument (combining debt and equity) and that it only had a single subscriber, namely Singapore incorporated firmAdvance Capital Partners Pte Ltd.

Meanwhile, Samsul said there were a lot of opportunities for Censof and that the impending implementation of the goods and services tax (GST) of 6% effective April 1, 2015, would boost its revenue.

Censof is one of the major accounting solutions providers for government agencies. It has been reported that it would likely be a frontrunner for a sizeable contract in relation to the provision of GST software services nationwide.

Kenanga Research said it was positive on Censof’s long-term outlook.

For the third quarter ended Sept 30, Censof posted a net profit of RM1.13mil, slightly lower than the RM1.78mil registered in the same period a year ago. Its revenue for the quarter rose to RM7.65mil from RM5.33mil last year. In the first nine months, it posted a net profit of RM3.82mil on a revenue of RM33.13mil.