Talam Coming Out Of PN17

There is an unlikely stock that I like, Talam. It will be coming out of PN17 sometime in May. Paid up has ballooned to nearly 2bn shares of 20 sen each. But debt levels will be coming down to RM300m due to the debt restructuring plan. I estimate that its net asset per share will still be aroun 21 sen. The attraction is its NTA plus land bank. Its rising from the ashes. It might not regain the prominence it once had but below 10 sen is just too cheap. Talam should be trading at 14-16 sen.

Pursuant to the debt Regularisation plan, Talam has accounted for RM145.37m of the income arising from the reversal of interest previously accrued and debt waiver granted by the lenders. In addition, RM381.63m arising from the reduction of share capital and the entire share premium account was credited to the accumulated losses account during the period under review.

Market Cap: RM135.2m

Paid up 20sen shares: 1.931 bn shares

Borrowings: RM750.16m (that should come down to RM300m soon)

Net Profit 12 month ended 31 January 2009: RM60.325m

EPS: 3.1 sen (a large portion from the reversal of interest RM145.37)

Net assets per share: rough calculations should be RM0.21


Talam's executive director, Chua Kim Lan said Talam was targeting to complete its regularisation plan by May this year, for the company to have its Practice Note 17 status removed. Chua said after completing the regularisation plan, the debt level of Talam will be reduced from RM3 billion to RM300 million.

Talam will not be launching any new projects at the moment as it is focusing on completing property sold in Selangor. A majority of the projects in Selangor will be completed this year and the remaining portion in 2010. According to Chua, Talam has a landbank of about 4,000 to 5,000 acres, the majority of which is in Selangor.

Chua also disclosed that Talam had plans to dispose its non-core assets to streamline the company. "We plan to dispose investment properties and land within Selangor with a cash value of between RM200 to RM300 million. Previously, we sold about RM150 million in non-core assets," she said.

p/s photos: Nozomi Sasaki