Stone Master Corp

Stone Master Corp

Postby winston » Sun May 08, 2016 3:25 pm

not vested

5 December 2015

Stone Master all set for vendor financing

BY INTAN FARHANA ZAINUL

Marble and granite trader has RM3.1bil worth of deals with property developers under the scheme

STONE Master Corp Bhd, a manufacturer and trader of marble and granite products, is creating ripples in the property development market.

Over the last four weeks, it has entered into framework agreements (FA) with major property developers in Malaysia, to provide them with “interest-free vendor financing services”.

What is interesting is that within this short period of time, the total amount of vendor financing that it has agreed to provide now stands at a whopping RM3.1bil and counting. Stone Master is still in the process of entering into many more such agreements, sources say.

Stone Master is offering building-finishing material products and services to Malaysian property developers on vendor financing schemes that require a repayment only after the developer has completed the projects.

Stone Master has tied up with a number of China companies to provide its building-finishing material products and services under this scheme.

And coupled with the trade financing offering, it is clear that Stone Master is acting as an agent to the Chinese parties coming into the Malaysian market and collecting fees from providing this service.

But will the provision of the financing increase Stone Master’s trade receivables?

Going by information gleaned from its announcements, it is unlikely that this will happen.

This is because Stone Master has revealed that it has “certain arrangements” with the Chinese parties.

Stone Master had yet to reply to questions from StarBizWeek as at press time.

Sources say that it is possible that these parties include financial institutions in China, and that Stone Master has entered into “back-to-back” arrangements with these financial institutions for the provision of the financing.

The scheme does sound attractive for property developers to boost their cash flow, especially during a soft property market.

Mah Sing Group Bhd, which has entered into the framework agreement with Stone Master, has said that the agreement would give the company the option of tapping into various premium products, while enjoying cost savings from the extended credit term with no interest cost, as well as from economies-of-scale arising from the large number of projects under development.

Developers under the vendor FA will enjoy five years of interest-free financing, with the agreement value equally divided into a 60-month instalment period.

But is there a catch?

According to filings, Stone Master would be entitled to impose “late payment interest” as high as 18% per annum on the instalments.

In addition, the companies under the FA would need to provide the equivalent security to Stone Master in the form of corporate guarantees and unsold properties as collateral.

Stone Master says the FA will not have “any immediate financial effect on the group”.

Notably, Stone Master has been in the red since 2006.

For the financial year ended Sept 30, 2015, it posted a wider net loss of RM8.5mil from RM3.26mil in the previous financial year due to the weaker ringgit and lower sales.

According to Stone Master’s recent quarterly results announcement, it said that the recent tie-up with 11 vendors from China is the company’s new business direction to reduce its exposure to the US dollar.

“This is to ensure that purchases shall be transacted in the yuan instead of US dollars in order to reduce cost and secure consistent supply of goods with assured quality and to gain speedy and more extensive access to the Malaysian as well as Singaporean markets,” it said.

Shares in Stone Master have jumped 65% to 34 sen at yesterday’s close from its year’s lowest level of 20.5 sen on Aug 17.

However, on a year-to-date basis, the share price has declined 36%. In April, the company announced a share capital reduction and a rights issue.

So, will Stone Master’s business plan lift it to profitability?

While some quarters agree that the framework pact will work in favour of both Stone Master and property developers in terms of enhancing their cash flow, it remains to be seen how the scheme will work and also what will happen to other local building-finishing material companies.

Source: The Star

http://www.thestar.com.my/business/busi ... financing/
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Re: Stone Master Corp

Postby winston » Sun May 08, 2016 3:28 pm

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3 December 2015

Titijaya inks deal with Stone Master

KUALA LUMPUR: Titijaya Land Bhd has signed a framework agreement (FA) with Stone Master Corp Bhd (SMCB), for the products and services provided by SMCB at competitive prices on selected development projects.

In a filing with Bursa Malaysia, Titijaya said SMCB agreed to offer the products and services, coupled with interest-free vendor financing services to the company, over 18 months from the date thereof in the FA.

According to the statement yesterday, Titijaya will accept the dual offers subject to all the salient terms and conditions as stated in the agreement.

“Under the FA agreement, payments will only be made after the completion with favourable deferred payments terms of 60 months with no interest charges.

“This will contribute positively towards the company’s operating cash flow,” it said in the statement.

It said the FA was not expected to have any material effect on the earnings, gearing and net assets of Titijaya for the financial year ending June 30, 2016.

Source: Bernama
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Re: Stone Master Corp

Postby winston » Sun May 08, 2016 3:41 pm

October 22, 2015

Stone Master plans land, office building buy in KL for RM15m

By Supriya Surendran

KUALA LUMPUR (Oct 22): Marble and granite products trader Stone Master Corp Bhd has entered into a heads of agreement (HoA) to acquire YNL Properties Sdn Bhd (YNL Prop), the owner of a piece of land measuring 305.6 sq m with an 11½-storey office building on it in Jalan Raja Chulan here, for RM15 million.

The consideration is more than half the market capitalisation of the group, which stands at RM22.03 million according to the last transacted price of its shares at the close of trading hours today of 24.5 sen, down 0.5 sen or 2% from yesterday's close.

It signed the HoA for the proposed acquisition of the entire equity stake in YNL Prop with its vendors Lai Yeng Fock, Ng Sing Huat and He Min-Er, today.

In its filing to Bursa Malaysia, Stone Master said the primary objective of the proposed acquisition is to house its existing corporate and head offices, and/or showrooms, if necessary and deemed fit, in the said office building.

"The board has also accounted for the current rental payment (ie expenses incurred) to the landlord of its existing office premise, which may escalate over time.

At present, the rented premises of Stone Master comprises a four-storey commercial shoplot office building entailing rental payable to the existing landlord.

"The said property will not only be used to continue its existing business operation but it will enable the company to have a permanent premises of its own for its further expansion plans, which definitely will contribute positively to the future earnings of the company and its group as a whole," said Stone Master.

Stone Master said the HoA will form the framework for future negotiations, which the parties anticipate to culminate within 30 days in a definitive agreement in the form of a share sale agreement (SSA).

The acquisition of YNL Prop will be subject to approvals from the Securities Commission Malaysia, Bursa Malaysia, Stone Master's shareholders and the results of a due diligence exercise — to be carried out and completed within two months from the date of the SSA.

Source: theedgemarkets.com

http://www.theedgemarkets.com/my/articl ... y-kl-rm15m
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Re: Stone Master Corp

Postby winston » Sun May 08, 2016 3:45 pm

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August 7, 2015

Stone Master inks deals to distribute premium ceramic sanitary ware and electronic locks

By Chester Tay

KUALA LUMPUR (Aug 7): Stone Master Corp Bhd has become the exclusive agency of Hong Kong-incorporated Lion Legend Holdings Ltd and China-incorporated Guangdong Be-Tech Security systems to design, distribute and install their respective products in Malaysia and Singapore.

In its filing to Bursa Malaysia today, Stone Master said it has entered into separate exclusive agency agreements (EAA) with the two today to effect the tie-ups, which it will have to fork out a collective RM230 million as one-time ‘initial agency fees’.

However, Stone Master, which closed 1 sen or 3.57% lower at 27 sen today for a market capitalisation of RM25.17 million, did not specify as to how it intends to fund the agency fees.

As at March 31, its cash and bank balances stood at only RM417,000, with total assets valued at RM57.6 million.

Meanwhile, in the HoA it had inked with Lion Legend prior to the signing of the EAA, Stone Master said the deal will grant it the rights to design, distribute and install the ‘ROY’ ceramic sanitary ware products in Malaysia and Singapore.

Lion Legend specialises in the development and production of various types of ceramic sanitary ware products and is a wholly-owned unit of Germany-listed ROY Ceramics SE.

In return for the RM150 million initial agency fees, Lion Legend will provide Stone Master with an assured profit guarantee of 30% of the gross contract value that the latter secures in the future, with a one-time initial kick-off package in the form of products and services, worth RM130 million.

Stone Master said this tie-up will enable it to diversify and expand its current revenue base. Its traditional business is now primarily in granite and marble products, ceramic floor tiles and sanitary wares, which it said is a highly competitive market.

“This newly-established alliance will enhance Stone Master’s leading role in the Malaysian building materials industry and move up the value chain by making available high-end quality ceramics sanitary ware and bathroom accessories under the world renowned brand of ‘ROY’ to Malaysian market,” the group’s executive chairman Datuk Eii Ching Siew said in the filing today.

Separately, the group has also entered into an exclusive agency agreement for which it will pay an initial agency fee of RM80 million to Guangdong Be-Tech Security Systems to design, market and install the latter’s ‘BE-TECH’ electronic security locks.

In return, Guangdong Be-Tech will provide Stone Master with an assured profit guarantee of 30% of the gross contract value that the latter secures in the future, with a one-time initial kick-off package in the form of products and services, worth RM65 million.

The respective tenure of both the EAAS is five years.

It also stated that risks associated with the tie-ups — which is, if it fails to secure any business for the respective products and services — are minimised, as the products were in line with Stone Master’s core business over the past two decades.

Stone Master added that the EAAs will contribute significantly to its overall trading profit.

Furthermore, it said the one-time kick off packages from Lion Legend and Guangdong Be-Tech, worth RM195 million, together with the profit guarantees given by both principals, “already assures the profitability of any contract secured under this trade”.

Source: theedgemarkets.com

http://www.theedgemarkets.com/my/articl ... onic-locks
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Re: Stone Master Corp

Postby winston » Sun May 08, 2016 3:51 pm

13 June 2015

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Complaint against Stone Master big guns

BY LEONG HUNG YEE

A complaint has been lodged with the Securities Commission (SC) against a few substantial shareholders of marble and granite manufacturer, Stone Master Corp Bhd for breaching the Malaysian Code on Take-Overs and Mergers, 2010.

A letter, written by a minority shareholder of Stone Master, was handed to the investor affairs and complaint department of the SC in March this year. The SC has yet to revert to StarBizWeek queries as at press time.

The letter alleged that executive chairman Datuk Eii Ching Siew, deputy executive chairman Datuk Karen Lee Vun Ya and executive director Datin Chan Chui Mei were related parties and have triggered a mandatory general offer (MGO) in accordance with the takeover code.

The letter said this was based on share purchases by these parties in August and September 2014.

As at Feb 16, 2015, Eii is the single largest shareholder with an 18.4% stake, or 8.5 million shares in Stone Master while Lee has a 16.32% stake. Chan, who holds her stake through Starfield Capital Sdn Bhd, has 10.51% or 4.856 million shares.

The complaint letter indicated that the trio collectively own 20.895 million shares, or 45.23%, surpassing the 33% shareholding threshold level.

Eii did not respond when StarBizWeek tried contacting him for comments by phone and SMS.

Under Malaysia’s takeover and merger rules, a GO will be triggered if a party has purchased more than 33% interest in a listed company.

In the past, there have been a number of complaints filed by shareholders alleging that certain parties were parties acting in concert (PAC) and had hence triggered MGO.

However, a corporate lawyer explains that it is not easy to prove PAC and that a lot of evidence need to be submitted before such finding can be made.

The complaint letter also alleges that the trio “have surreptitiously taken management control of Stone Master”.

Eii and Lee acquired their stakes on Aug 1, 2014 and Aug 6, 2014 respectively in an open market transaction at 80 sen each.

Chan, who is the executive chairman of Starfield, acquired the Stone Master shares through a series of transactions in late August 2014 and early September. Chan was subsequently appointed director on Sept 19, 2014.

Interestingly, the current board of directors are all newly-appointed between August 2014 and February 2015. The previous board of directors all resigned last year with the latest one involving its managing director Tan Lee Chin on Nov 26, 2014, nine months after her appointment in February.

Notably, Eii, in his chairman statement in the company’s 2014 annual report concedes that there are some irregularities with the company’s financial statements.

He says its external auditor has given a qualified opinion on the matter of the recoverability of the trade receivables of Stone Master’s subsidiary, SP Granite Sdn Bhd.

“The external auditors, Baker Tilly Monteiro Heng has stated that they are unable to obtain sufficient and appropriate audit evidence on the recoverability of the amount owing from the trade receivables; more specifically, an amount of RM2.86mil owing by a former subsidiary to SP Granite which has been past due but not impaired.

“However, the directors are monitoring the recoverability of the amount owing and are in the midst of assessing the amount to be recovered from this trade receivables by considering alternative actions that may be available to the group,” Eii says in the annual report.

Subsequently, the directors obtained the agreement to contra the amount owing by the said trade receivable with the amount owing to a former director and other payable amounting to RM890,500. The directors have not made any allowance for impairment on this receivable.

The company also notes that the comparative figures as for the financial year ended Sept 30, 2013 were audited by another firm of chartered accountants other than Baker Tilly.

For the six months ended March 31, 2015 Stone Master’s net loss widened to RM1.57mil from RM815,000 in the same period a year ago.

However, its revenue was higher at RM43.7mil against RM39.8mil previously. Year-to-date, Stone Master shares have fallen more than 48% to close at 27 sen, its lowest level since July 2014.

Source: The Star
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Re: Stone Master Corp

Postby winston » Sun May 08, 2016 4:07 pm

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11 February 2016

Stone Master issues shares to settle debt

PETALING JAYA: Stone Master Corporation Bhd (SMCB) has issued 7.65 billion settlement shares at a price of 40 sen, to settle RM3.06 billion outstanding debt owed to 25 creditors.

SMCB said it executed 25 settlement agreements with each of the respective creditors yesterday.

Except for its two major shareholders, executive chairman Datuk Eii Ching Siew and deputy managing director Datin Chan Chui Mei, the other 23 creditors had agreed to relinquish their right as shareholders of SMCB.

"Despite a dilutive effect on the existing shareholders' shareholdings in SMCB as a result of issuance of the settlement shares, the proposed special issuance is expected to have the following positive effects:
(a) reduce SMCB's debt without any cash outflow;
(b) the equity base and net assets of SMCB will be enhanced; and
(c) enable SMCB to improve its financial results," it said.

Source: The Sun Daily

http://www.thesundaily.my/news/1690344
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