Thursday, July 29, 2010

Some Comments On SJ Asset Management's 15.7% Stake In Maxbiz

In the following article on Star Business, SJAM licence revoked , one statement caught my attention.

  • SJAM is reported to hold a 15.7% stake in PN1-company Maxbiz Corp Bhd, which is a garment manufacturer.

Hmmm... SJ Asset Management held such a big stake in Maxbiz?

Yeah Maxbiz is the company that in July 2009 claimed that some 40 million in ASSets went missing! No Joke! See Honey Did You See My Missing 40 Million Assets? and Maxbiz: The Dog Ate My Assets!

Now I have decided to dig up some history on Maxbiz.

It was way back in December 2002 when Maxbiz proposed to be the shining White Knight for financial distressed company GEAHIN ENGINEERING BERHAD

That RTO was completed by end 2004.

Here's an old article describing Maxbiz.

  • Maxbiz: Steel fabrication a potential core business

    MAXBIZ Corp Bhd, which is taking over the listing status of Geahin Engineering Bhd under a restructuring scheme, has charted a business plan for the new entity to follow its listing on the main board of Bursa Malaysia Bhd next month.

    Managing director Nor Aminudin Nor Rahmat said the company, whose core businesses are in precision dyeing and garment manufacturing, will also look at steel fabrication as another core business.

    The company, which manufactures for export, supplies its women’s and men’s apparel to Wal-Mart, Charles Vogele, St Walter, Harley Davidson and Champion, an established brand name in the US. Maxbiz exports to the US, Europe, Denmark, Germany, Japan and West Asia.

    “After listing, we’ll be looking at steel fabrication. We are deeming that a zero contribution to Maxbix now but once listed, we’ll be able to chart the business growth under the stewardship of the new management.

    “We’ll be able to see what are the prospective earnings for the group,” Nor Aminudin told Business Times.

    Maxbiz bought the steel fabrication factory in Malacca from Geahin but it does not form a premium for the listing status.

    “We’re merely buying assets and we’re paying RM22.6 million via an issuance of Redeemable Convertible Secured Loan Stock (RCSLS) to the creditors of Geahin for this,” he said.

    Nor Aminudin plans to expand the steel fabrication business and cater to its non-traditional markets in marine, shipping, and the oil and gas fields.

    “As a business entity, we are continuously looking at every aspect. Competition is real under the borderless regime. You have to be at least half a step ahead of the competitors.

    “So, we have all the reasons to believe that we will likely approach some variations of this business, having understood the track record and feasibility of the steel fabrication business,” he said.

    “Historically, this business has been focused on civil, infrastructure and building. We believe that it can be expanded, perhaps, into marine, shipping, oil and gas which are the extension of the business.”

    Under the restructuring, Maxbiz agreed on a premium and a consideration of Geahin’s listing status valued at RM20 million via the issuance of 20 million new ordinary shares of Maxbiz to creditors of Geahin.

    The scheme also entails a capital reduction of 10 to 1 shares at Geahin, whereby the paid-up capital will be reduced to about RM2 million from about RM20 million. Maxbiz will issue 2 million shares to Geahin shareholders pursuant to the capital reduction and, as a result, the paid-up capital will stand at RM22 million.

    Maxbiz then acquired MKK Industries Sdn Bhd and Mayford Garments Sdn Bhd for RM120.231 million, and with this, the total paid-up capital stands at RM142.231 million of Maxbiz shares, which qualifies the company to be on the main board.

    The enlarged paid-up capital of Maxbiz will be eventually RM164.831 million upon conversion of the RCSLS. The scheme also entails an issue of 3 million Redeemable Unsecured Loan Stock (RULS).

    “We applied for a transfer from the second board to the main board, which has been approved,” Nor Aminudin said.

    After the listing, Maxbiz’s three substantial major shareholders will be Capital Line Sdn Bhd, Inno-Option Sdn Bhd and Lim Lay Kian.

    Besides Nor Aminudin as the managing director, the board members will be Datuk Wan Ismail Abdul Rahman (chairman), Mohammad Zahar Zain (executive director), Datuk Zolkepli Abdul, Datuk Harun Siraj, Chon Chye @ Chon Chong On and Lim Lay Kian.

    Nor Aminudin said Maxbiz is looking for new advanced technology in sync with its goal to be among the most advanced technology-based textile manufacturers in Malaysia. The company has two factories in Sri Gading, Batu Pahat, Johor.

    He said Maxbiz wants to penetrate the domestic market and is currently looking at the possibility of acquiring non-listed companies in the garment business to realise its plan.

    “For the domestic market, we’re looking at acquisitions and we’ve been talking to a few potential parties that have approached us.

    “We can either grow organically or through acquisitions, but in our case, time does not permit us to grow organically. It’s still at a preliminary stage ... not finalised yet,” he added.
    Nor Aminudin also said the company, which uses innovative and high-technology machinery such as robots for high efficiency in production, will invest about RM20 million in machinery or its factories.

    It has purchased a set of finishing machines for between RM12 million and RM15 million which will be delivered in December this year. It is looking at buying a bigger broiler, priced at about RM4 million which uses wastage burning instead of oil in line with the company’s environmentally-friendly principle. In addition, the company needs about RM3 million for its laboratories.

    “These machines will enable us to upgrade our quality and provide better service to our customers. It will also lead to cost-saving,” Nor Aminudin said.

    With all these measures in place, he believes that Maxbiz can retain and improve its business, particularly in quality precision next year when liberalisation comes into play. “We have to double our market, double the turnover,” he said.

    Asked why Maxbiz chose to be a white knight for Geahin, Nor Aminudin said: “Because of the profile of its creditors, its management and owners ... the readiness of Geahin. We were not particularly concerned about its business as we, the white knight, were focusing on the listing status,” he added.

A company whose core business is precision dyeing and garment manufacturing but reckons that steel fabrication could be a potential core business.

( Yeah... !!!!..... exactly! )

You know.. Uncles always argue that if a company business is really good, then it should never have a problem listing directly. White knight companies? They tend to be problematic!

Anyway... Maxbiz was listed.

Feb 2005: Quarterly rpt on consolidated results for the financial period ended 31/12/2004 - Maxbiz recorded some 12.695 million of profits for fiscal year 2004. ( Rather too early to pass judgement, yes?)

First warning came in Oct 2005.

  • Maxbiz defaults on RM3m loan stock redemption

    October 27 2005

    The company says it was unable to make the payment of because it has not been able to recover debts amounting to RM5.7 million from Geahin Engineering

    MAXBIZ Corp Bhd, a manufacturer of fabric and textile products, has defaulted on the redemption of its RM3 million loan stocks.

    Under a trust deed, Maxbiz should have redeemed RM1.5 million on October 7, 2005, the first anniversary date of the two-year loan stocks.

    In its filing to Bursa Malaysia Bhd the company said it was unable to make the payment because it has not been able to recover debts amounting to RM5.7 million due from account receivables from Geahin Engineering Bhd.

    The company had initially planned to use the recovered debts from Geahin to redeem the redeemable unsecured loan stocks (RULS) which carry a 5 per cent coupon.

    However, this could not be done because it has not been furnished the necessary documents needed from Geahin for Maxbiz to make the necessary claims from debtors.

???? LOL! And it's only 3 million!

Feb 2006: Quarterly rpt on consolidated results for the financial period ended 31/12/2005 - Maxbiz recorded some 2.833 million in losses for fiscal year 2005. Previous year net profit was adjusted down to 12.205 million. This is understandable as these are just unaudited numbers.

Feb 2007: Quarterly rpt on consolidated results for the financial period ended 31/12/2006 - Maxbiz recorded some 6.526 million in losses for fiscal year 2006. Previous year net losses is adjusted to up 3.026 million.

Feb 2008: Quarterly rpt on consolidated results for the financial period ended 31/12/2007 - Maxbiz recorded some 22.007 million in losses for fiscal year 2007. Previous year net losses is adjusted up to 6.760 million.

Feb 2009: Quarterly rpt on consolidated results for the financial period ended 31/12/2008 - Maxbiz recorded some 6.827 million in losses for fiscal year 2008. Previous year net losses is adjusted down to 21.945 million

LOL! Putting such earnings performance into perspective, it's not that big of a shocker regarding its missing 40 million in assets!

Feb 2010: Quarterly rpt on consolidated results for the financial period ended 31/12/2009 - Maxbiz recorded some 2.904 million in losses for fiscal year 2008. BUT... but... the previous year net losses is adjusted up to 76.926 million!!!!!!!!!!!!!!


Wiki Wiki!

And SJ Asset Management Sdn Bhd (SJAM) is a fund management?

Now I really would like to see its reasoning why it (SJAM) concluded that Maxbiz is worth an investment!