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Monday, November 25, 2013

Move to boost Insas shareholder return? (BT)

Insas Bhd’s board of directors is expected to meet today to outline plans to boost shareholder return.
The flagship public-listed company of tycoon Datuk Thong Kok Khee has been profitable for the past 10 years.

The last time Insas was in the red was in 2003, when it suffered a RM5.29 million loss. Despite 10 years of steady profit, investors had shied away from Insas.

Among the reasons cited were that the company was hoarding too much cash and its dividend payment was erratic.

“The board will try to address some of those issues. The board may also discuss a plan to float its subsidiary, the Melium Group, next year.

“The listing of Melium can easily be worth about RM600 million,” said a source, adding that this will further boost Insas’ war chest.

Melium, some 43 per cent-owned by Insas, has yearly sales of about RM150 million and is considered the country’s leading luxury fashion and lifestyle retailer with about 40 stores

It is the franchise holder for Dome Cafe, Etienne Aigner, Hugo Boss, Christian Lacroix, Cole Haan and Emilio Pucci.

Insas' non-independent director Datuk Wong Gian Kui told Business Times that floating Melium is a possibility but would not put a time frame to it.

Sources said with the planned Melium initial public offering, Insas is also looking at a firm dividend payout plan and a scrip exercise to facilitate the issuance of warrants and a share split.

Insas has about RM229.73 million in cash and total assets of about RM930 million.

"Changing the face of Insas is crucial. The company is doing well. Its first-quarter results, which will be announced this week, will show that Insas is now a different animal and belongs to the tier-one stage," claimed the source.

Insas is also the dominant shareholder of Inari Amerton Bhd and M&A Securities Sdn Bhd.

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