POLYMER Link Holdings Bhd, the first company on Bursa Malaysia’s Leading Entrepreneur Accelerator Platform (LEAP Market) to withdraw its listing from Bursa Malaysia, says it will not wait for the transfer framework from the bourse and the Securities Commission Malaysia (SC). The framework is meant to facilitate the transition of performing companies from the LEAP Market to the ACE Market without necessitating what is said to be a costly and tedious documentation process to SC, as with a brand-new submission.

Note that while Polymer Link’s filing with Bursa cites the LEAP Market’s lack of liquidity as the reason for appealing to go private, Polymer Link tells The Edge that its departure from the board has more to do with the fact that it had achieved its initial goals in getting listed.

Polymer Link raised RM5.5 million in its initial public offering on April 27, 2018, at an offer price of 12 sen per share. Its shares were last traded at 20 sen.

“We will not wait for the transition framework, as we are planning to undertake a certain restructuring exercise and the implementation will be more flexible if the company is private. A good liquidity of shares is necessary when the company is expanding quickly and looking for equity to fund the expansion. We believe our financials are strong; therefore, we can explore various fund-raising options,” its group managing director and CEO Eddie Koh tells The Edge.

“We listed on the LEAP Market for the purpose of profiling Polymer and have learnt a lot from the exercise, namely, the requirements for compliance and transparency. Now that we have the publicity and experience, we need to move forward with our plans.”

Given the lengthy wait for Bursa and SC to produce the transfer framework for waiting players, many LEAP-listers are said to be considering potential mergers and acquisitions (M&A). It is understood that many LEAP-listers have been seeking advice on delisting as they weigh local and international potential offers for M&A.

In a filing with the bourse, the company said its seven controlling shareholders requested the delisting, whereas its four minority shareholders, who hold 43.26 million shares or 9.35% equity interest, have undertaken to vote in favour of the proposed listing withdrawal at an upcoming extraordinary general meeting and that they will continue to hold on to their shares until the completion of the exercise.

The minority shareholders also decided not to request an “exit offer” in the form of a reasonable cash alternative or other reasonable alternative pertaining to the proposed listing withdrawal, prompting Polymer Link to seek an exemption from the stock exchange from having to make an exit offer to the minorities.

“To be fair to the minority shareholders, Polymer Link should provide a general offer to the minority shareholders so that the privatisation would be equally beneficial to all parties,” says an industry observer who declines to be named.

Polymer Link derives 94.7% of its revenue from manufacturing and trading compounded and non-compounded plastic powder, while 4.3% comes from the sale of industrial machinery and equipment, and the balance 1% from investment holdings and other business activities.

Polymer Link has business dealings mainly in the Philippines and India, and supplementary streams of income from Vietnam, Australia and the UK.

Net profit declined to RM2.97 million for the six months ended March 31 (1HFY2020), from RM5.4 million the same period a year ago, while revenue slipped to RM30.7 million from RM37 million.

Polymer Link attributes the decline in revenue to the implementation of movement restriction globally as a result of the pandemic, which disrupted the group’s shipment schedule and caused a sales order from a major customer in the Philippines to fall 12.98% during the period.