Chin Hin raises Ajiya stake by 12.27% to 66.4% for RM54.2 mil

• The purchase price of RM1.45 was agreed upon on a willing-buyer willing-seller basis, which is 9.9% lower than Ajiya’s closing price of RM1.61 on Friday.

KUALA LUMPUR (Jan 24): Building materials and construction engineering firm Chin Hin Group Bhd (KL:CHINHIN) has proposed to acquire an additional 37.38 million shares or a 12.27% stake in metal roofing and safety glass maker Ajiya Bhd (KL:AJIYA) for RM54.2 million or RM1.45 per share.

Upon completion, the shares purchase will effectively raise Chin Hin’s stake in Ajiya to 66.36% from 54.09%.

The purchase price of RM1.45 was agreed upon on a willing-buyer willing-seller basis, which is 9.9% lower than Ajiya’s closing price of RM1.61 on Friday.

According to the bourse filing, Chin Hin stated that the purchase aligns with its objective of increasing its stakes in companies with good profitability and potential for future growth, as it believes Ajiya’s prospects are improving.

“The board is of the opinion that Ajiya is poised to benefit from the various impetus for the construction industry in Malaysia, which includes the anticipated recovery of the property development and construction industry moving forward,” it said.

Based on its unaudited 12-month period ended Nov 30, 2024, Ajiya’s net profit fell 38.3% to RM34.17 million from RM55.43 million a year ago, while its total revenue increased 16.1% to RM353.87 million from RM304.81 million. Its unaudited net assets stood at RM2.16 per share as at Nov 30 last year.

Chin Hin said the purchase will be funded from internally-generated funds and borrowings, and the proportion will be determined later.

The exercise is expected to be completed by the third quarter this year.

To recap, Chin Hin had in March 2022 bought a 24.68% stake in Ajiya at RM1.45 per share at a total price of RM104.4 million and emerged as its single largest shareholder.

In September 2023, Chin Hin launched a mandatory general offer (MGO) for the remaining shares in Ajiya it did not own at RM1.53 per share, after its stake in Ajiya reached 34.1%. Following the MGO, Chin Hin owned 55.85% of Ajiya.

In May 2024, Ajiya agreed to extend a loan of RM250 million to Chin Hin with an annual interest rate of 7.5%, to be drawn down over 24 months.

Chin Hin plans to use the funds to grow its construction and building materials business. Out of the RM250 million, approximately RM110 million has been earmarked for acquiring two companies in the construction sector.

The major shareholders of Chin Hin, namely Chiau Haw Choon and his father Datuk Seri Chiau Beng Teik, both served in executive roles, namely the managing director and non-independent executive chairman respectively, in Ajiya.

Chin Hin’s shares fell three sen or 1.3% to RM2.34, giving it a market capitalisation of RM8.28 billion.

Meanwhile, Ajiya’s shares gained 15 sen or 10.3% to RM1.61, valuing it at market capitalisation of RM490.38 million.

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