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Wednesday, December 23, 2015

Golden Pharos to set up a JVco for timber-related biz

KUALA LUMPUR (Dec 22): Golden Pharos Bhd ( Valuation: 0.90, Fundamental: 0.95)’s unit Permint Plywood Sdn Bhd’s has formed a joint venture (JV) with Cymao Plywood Sdn Bhd to set up a company to pursue and engage in timber-related business and timber products.

The partnership is also to revive Permint Plywood’s facility and turn it around, initiate re-forestation and establish industrial forest plantation for sustainability of feedstocks, and to explore and implement value adding operations to maximise the natural resources of Terengganu.

Golden Pharos said a joint venture agreement (JVA) was entered into by Permint Plywood and Cymao Plywood today to cooperate in utilising each other’s resources to create “the role model of vertically integrated timber industry that is sustainable in both environment and profitability”.

Golden Pharos , which manufactures and trades wooden doors, windows, glass, plywood, and veneer through its subsidiaries, said the JVA has a minimum effective period of 10 years, and can be extended by mutual agreement of both parties.

The JV company (JVco) will have an issued and paid-up capital of RM1.6 million comprising 1.6 million ordinary shares of RM1 each. Permint Plywood shall take up 60% stake in the JVco while Cymao Plywood shall own the remaining 40%.

The JVco will utilise 40% internal fund from the paid up capital and 60% from external funding for its activities.

“The feasibility study undertaken by the company in respect of the cooperation has shown a favourable result/conclusion,” Golden Pharos said.

The JVA is conditional upon approval being obtained from relevant regulatory authorities, but is not subject to the approval of Golden Pharos’ shareholders.

Shares of Golden Pharos closed 1.5 sen or 3.45% higher at 45 sen today, for a market capitalisation of RM60.55 million.

(Note: The Edge Research's fundamental score reflects a company’s profitability and balance sheet strength, calculated based on historical numbers. The valuation score determines if a stock is attractively valued or not, also based on historical numbers. A score of 3 suggests strong fundamentals and attractive valuations.) 

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