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Saturday, February 15, 2014

PDZ’s asset acquisition is off (extracted fr Edge)

PDZ Holdings Bhd’s corporate exercise recently involving the takeover of private company Efogen Sdn Bhd has hit a brick wall, according to sources familiar with the matter.

It is understood that a meeting and subsequently an announcement to Bursa Malaysia pertaining to PDZ’s acquisition was to have been made last Friday, but this was not done as talks had fallen through.

An executive familiar with the deal confirmed that the talks had stalled, but said this was just one party and that there were other interested parties eyeing PDZ as well.

“This deal has been aborted ... it’s not fair for me to talk about it or give you the details,” the executive said, adding that given PDZ’s clean balance sheet, there are still other suitors, but declined to elaborate.

According to market observers, it is odd that the talks stalled as both parties are linked to former finance minister Tun Daim Zainuddin.

Tan is a known associate of Daim, while Efogen’s shareholders include Tan Sri Abdul Rashid Abdul Manaf, who was Daim’s
former lawyer. Abdul Rashid has almost 21% of Efogen.

Being a shipping firm, PDZ has a healthy balance sheet with net cash of RM17.8 million after deducting its long-term debt commitments of RM5.18 million and current liabilities of RM1.2 million. That makes it an ideal candidate for asset injection. However, the company has accumulated losses of RM22.08 million.

For its first quarter ended Sept 30, 2013, PDZ posted a net profit of RM778,000 compared to a net loss of RM265,000 a year ago.

This article first appeared in The Edge Financial Daily, on February 17, 2014.

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