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Cambodia: Sahas E&C deal paves way for PPSEZ buyback
Bourse-listed Phnom Penh Special Economic Zone Plc (PPSEZ) confirmed that it has absorbed the outstanding 40 percent stake in Sahas E&C Co Ltd – paving the way for the company to press forward with its proposed share buyback.
Sahas E&C was established in 2017 to provide in-house construction and engineering services for the SEZ. The company announced in March that it would postpone its share buyback programme until the consummation of the deal.
Local media reports indicate the deal was worth more than $1.725 million, valuing Sahas at approximately $4.3 million.
“It was always the intention of management to have full control of our subsidiary companies and Sahas E&C is no exception,” Wong Pang Nam, deputy chief financial officer for PPSEZ told Khmer Times.
“We expect our earnings will be enhanced both in the short and long term,” he added.
As a fully owned subsidiary of PPSEZ, the company, according to Wong, will “function as before with minor fine-tuning”.
Construction activities accounted for more than 22 percent of PPSEZ’s total revenue in the first quarter of the year, according to its disclosure.
Sources familiar with the matter said that PPSEZ completed the deal in two phases with the first transfer of $500,000 occurring in March after a share sales agreement was signed. The remaining funds were transferred on April 14.
Wong did not discuss the state of the proposed share buyback.
The buyback is believed to be postponed until next month or September as a result, depending on whether the pandemic subsides.
Regulators had previously told the firm to postpone its buyback to protect the interest of shareholders and public investors.
The completion of the deal was announced through the Cambodia Securities Exchange on Monday with the company noting that it is anticipating an approval letter from the General Department of Taxation.
The new corporate structure was formally registered with the Ministry of Economy and Finance on May 11, according to a statement issued by the company.
PPSEZ submitted paperwork last year to the Securities and Exchange Regulator of Cambodia to approve its share buyback.
Its shares subsequently closed higher for six consecutive sessions with the company reaching 10 percent of its annual trading volume in just three days after it was made public.
PPSEZ shares have performed well on the Cambodia Securities Exchange despite a decline in international demand, travel restrictions and lockdowns.
Wong said that most of the workforce in the SEZ had been vaccinated and “hopefully the impact of the Delta strain will be restricted”.
“The country’s travel restrictions have still not been lifted so new overseas investors visiting our zone are limited.
“However, we are fortunate to have a strong customer base who are prepared to invest further in our zone in these testing times,” Wong said.
Source: https://www.khmertimeskh.com/50899001/sahas-ec-deal-paves-way-for-ppsez-buyback/