Thursday, February 13, 2014

Frontken (Just Read No Punting)

To recap one block of shares traded off market at 47.6 sen on 29 March 2013. Some 27.63 million shares or a 2.76% stake crossed off market via a direct deal for rm13.15 million.

The pertinent question is on what grounds did Bursa Malaysia give the green light for the shares to be traded at 47.6 sen – a level the counter has never reached since Aug 2007. Under the listing rules, companies are required to obtain the authorities’ approval on share transactions done 15% higher than market value.

The transaction is most likely to be a divestment by OCBC Capital Investment Ltd. OCBC holds 2.74% stake Frontken shares – similar to the block of shares that crossed off market.

German based Jorg Helmut is currently (March 2013) the controlling shareholder holding 28.82% equity interest in Frontken, which provides surface metamorphosis engineering. The company’s main client are the semiconductor, oil and gas and power generation sectors.

The German shareholder emerged as the emerged as shareholder in July 2011. LTH is the second largest shareholder with a 6.29% stake.

Financially, Frontken has been profitable but its earnings have fluctuated. For the 2012 financial year ended Dec 31, the company posted a net profit of rm3.8 million.

On Feb 27 2013 the company was in the news when it informed Bursa of potential accounting irregularities noted in one of its wholly owned subsidiaries. Crowe Horwarth, appointed as special investigate auditor, had noted the irregularities.

It has bagged a US$34.5mil (RM110.6mil) contract in April 2013 from ATT Tanjung Bin Sdn Bhd to be the main contractor for a facility in Tanjung Bin, Johor.

Frontken Malaysia Sdn Bhd’s core activity is providing surface metamorphosis technology using thermal spray coating processes and a series of complementary processes, including mechanical and chemical engineering services. ATT is principally engaged in the development, management and operation of multi-products petroleum facilities.

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Please note that all data given are merely blogger's opinion. It is strongly recommended that you do your own analysis and research before investing.