KUALA LUMPUR: Chin Hin Group Bhd has emerged as the single largest shareholder in Ajiya Bhd following a deal to acquire 72 million or about 24.68% equity interest in the building materials manufacturer for a total consideration of RM104.4mil.

       In a bourse filing, the construction and property group said it had penned a conditional share sale agreement with Ajiya's existing largest shareholder and managing director Datuk Chan Wah Kiang and Avia Kapital Sdn Bhd to acquire the shares, which are valued at RM1.45 apiece.

       It said the purchase price represents a 23.13% premium to the five-day volume weighted average market price of Ajiya shares up to the last practisable date of RM1.1776.

       As at 12.30pm, shares in Ajiya, which have been listed on the Main Market of Bursa Malaysia since 2003, were last traded at RM1.20 a share, five sen or 4% lower than its previous closing price, for a market capitalisation of about RM350.1mil.

       According to the filing, Chin Hin will purchase the entire 20.76% direct stake owned by Chan as well as 3.92% equity interest from Avia Kapital with a combination of internally generated funds and bank borrowings.

       Following the transaction, Chan will continue to have a 10.62% indirect stake in Ajiya while Avia Kapital will own a 6.7% share.

       Under the terms of the deal, Chan will also resign as managing director of Ajiya and serve as its group CEO for two years.

       “The acquisition is in line with the Group’s objective of acquiring strategic stakes in companies with potential for future growth. Synergistic benefits are expected to arise from the acquisition as both the Group and Ajiya Group are operating in and servicing the same industry, namely the construction and property development industry.

       "In addition, Ajiya Group also has overseas presence in countries such as Thailand. Chin Hin may be able to leverage on the overseas network for future expansion abroad," said Chin Hin Group managing director Chiau Haw Choon in a statement.

       Ajiya's Datuk Chan added that the property development and construction sectors in Malaysia have shown meaningful signs of recovery, with promising growth prospects ahead.

       "Coupled with the low interest rate level for residential and commercial unit purchases, Ajiya is likely to benefit from the higher demand for building materials, namely metal and safety glass products.

       "On the other hand, the Malaysian government’s renewed interest in affordable houses is also expected to drive more job flow for Ajiya Green Integrated Building System (AGiBS), which is our very-own Industrialised Building System (IBS) solution," he said.

       Ajiya's balance sheet is backed by total assets of RM485.5 million against total liabilities of RM67.3mil and sat on a cash pile of RM146.7mil as at end-November 2021

       The company completed its financial year ended Nov 30, 2021 with a net profit of RM18.9mil against revenue of RM268.5mil. In comparison, Chin Hin recorded a net profit of RM31.3mil and a revenue of RM1.2bill for the 12-month period ended Dec 31, 2021.

       Before the midday break, Chin Hin's stock last traded up one sen or 0.38% at RM2.66 apiece.