PETALING JAYA - Related companies Can-One Bhd, Kian Joo Can Factory Bhd and Box-Pak (M) Bhd have applied to suspend trading in their stocks until Thursday.
They requested for trading suspension on Bursa Malaysia simultaneously from 12.09pm yesterday, pending a material announcement that industry observers say could mean privatisation or some form of business rationalisation.
An industry observer said it was logical for the owner of Can-One to consolidate the three businesses. Can-One owns 32.9 per cent of Kian Joo while Kian Joo owns 54.83 per cent in Box-Pak.
"Another way of rationalisation would be to merge all the businesses, perhaps through a special purpose vehicle," he said.
However, he noted that privatisation had always been the talk for Kian Joo but if Can-One wanted to take Kian Joo private, it would need to privatise Box-Pak too.
He added that Can-One would need to cough up some RM700mil (S$272 million) to privatise Kian Joo.
"It is going to stretch their balance sheet, given that they already have more than RM200mil in borrowings," he said. "Whether the banks will approve the financing facility is the question."
He said the owner of Can-One, director and major shareholder Yeoh Jin Hoe, was believed to have the financial means to privatise Can-One.
Yeoh was previously the managing director, while his son Marc Francis Yeoh is now chief operating officer and executive director.
Assuming all three businesses are taken private, the industry observer said the owner could expect RM60mil in earnings from Can-One and a combined RM140mil from Kian Joo and Box-Pak in the financial year 2014.
For the third quarter ended Sept 30, 2013, Box-Pak achieved a net profit of RM3.3mil, 46 per cent lower than the RM6.1mil posted a year earlier, attributed to higher labour costs following the implementation of minimum wages in Malaysia and the revision in minimum wage rate in Vietnam.
It said in a filing with Bursa Malaysia that its revenue for the quarter was RM76.5mil, up 17 per cent from RM65.3mil a year ago due mainly to the increase in demand from existing customers from Vietnam.
For the nine-month period, Box-Pak recorded a net profit of RM10.6mil versus RM15mil a year earlier. Revenue was 11 per cent higher at RM213.1mil compared with RM192mil before.
Can-One and Kian Joo, which have yet to release their latest third-quarter results, made a net profit of RM17.36mil and RM32.17mil, respectively, for the second quarter ended June 2013. Can-One's earnings for the period was down about 50 per cent from RM34.93mil a year earlier while Kian Joo's net profit was higher by 75 per cent from RM18.38mil.
Can-One, Kian Joo and Box-Pak ended their half-day trading at RM3.46 (up nine sen), RM3.21 (five sen down) and RM2.25 (unchanged), respectively.