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Thursday, June 23, 2011

Stocks to watch: Lion Group, UM Land, KBB, Grand-Flo, YSP (Edge)

Companies in the Lion Group could see strong trading interest on Thursday, June 23 on news that China’s second largest steelmaker Baosteel Group Corp was in talks to buy a stake.

A Bloomberg news report said Baosteel was keen to buy a stake in Amsteel Mills Bhd from Lion Group for US$1 billion. Lion Industries share price jumped 24 sen to RM1.87 and Lion Corp added 5 sen to 30 sen.

Other companies which could see trading interest are UNITED MALAYAN LAND BHD [] (UMLand) KBB RESOURCES BHD [], Grand-Flo Bhd, YSP Southeast Asia Holding Bhd and Berjaya Corp Bhd.

UM Land plans to launch more new projects with a total gross development value (GDV) of nearly RM500 million in the financial year ending Dec 31, 2011.

These projects from both the township and niche divisions would be within Kuala Lumpur and Iskandar Malaysia. The projects are expected to boost the group’s earnings over the next two years.

KBB is still in the midst of finalising the debt restructuring agreement but is also open to new corporate proposals. It added there were indications the financial position was being regularised.

The company referred to its May 31 announcement that the Corporate Debt Restructuring Committee (CDRC) received approval exceeding 75% of each class of creditors for the proposed debt revamp.

“The approval from its scheme lenders could indicate that the financial position of the company is regularised and may be subsequently uplifted from PN1,” it said.

Tracking solution firm, Grand-Flo has secured two networking jobs in Thailand worth RM90 million.

"Both jobs are awarded by the Communications Authority of Thailand (CAT). The first job, worth RM50 million, is in the province of Nakhonratsima while the other, in the province of Chiang Mai is valued at RM40 million," group managing director-cum-group president Derrick Tan was quoted saying by Bernama.

He said the company would obtain shareholders' approval, at an extraordinary meeting next month, for the RM40 million-job as the total value of both jobs were huge.

"They are BOT (build, operate and transfer) projects for five years which will enable us to collect rental from 2011 till 2016. After that, we will hand over to CAT and will charge them for maintenance," Tan said after the AGM. He said the projects would generate recurring income of between RM3 million and RM4 million a year for five years.

YSP Southeast Asia Holding Bhd will allocate RM17 million for capital expenditure over the next three years to boost its pharmaceutical business.

Its president and group managing director Datuk Dr Lee Fang Hsin said the capex would be from the proposed renounceable rights issue which the shareholders had unanimously agreed to. He was confident the rights issue would be taken up quickly.

"About RM7 million will be used for the expansion of the company's existing local production facilities at Bangi, Selangor," he was quoted by Bernama as saying.

BERJAYA CORPORATION BHD [] and Kim Eng Holdings Ltd have terminated their discussions over BCorp’s proposed sale of Inter-Pacific Securities Sdn Bhd’s stockbroking business.

BCorp said the agreement for the sale of 100% of the stockbroking business “was mutually terminated today”.

It said the parties could not mutually agree to the terms of the proposed 100% disposal and accordingly, agreed to discontinue further negotiations. Earlier, the agreement was a 75% stake.

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