What’s Up? Bintai Kinden

Bintai Kinden

What’s Up? … dated July 2011

BKC is selling its 69.85% stake in BKPL to Lerento Bio Chem Ltd for rm150 million in new shares with free warrants. This will make Lereno which is controlled by BKC’s major shareholder a 60.62% owned unit of BKC.

Lereno’s net tangible assets as at March 31, 2011 will rise from negative S$2.15 million to S$33.62 million after Lereno sold its biofuel processing related businesses. That puts the value of BKC’s 60.32% share in Lereno at S$20.28 million.

Lereno’s market cap should theoretically be a S$102 million based on the price of half sen piece at which it is issuing new shares to buy BKPL and its enlarged share base,

That values BKC’s 60.32% stake at S$61.54 which is sizeable considering BKC’s market cap stood at rm35.84 million as its 34.5 sen close. BKC is trading at a discount to its net asset per share, which is expected to rise from 66 sen to 67 sen following the acquisition.

BKC may not lose much earnings contribution from injecting its BKL stake into Lereno given its 60.32% equity interest Lereno.

Lereni will in turn end up owning 100% of BKPL after buying the remaining 30.18% stake from Biz Investment Pte Ltd.

In total, Lereno is buying BKPL for rm215 million in new shares issued at half a cent apiece with free warrants.