Ahmad Zaki Resources Berhad: Detailed Shareholder Circular Highlights

Ahmad Zaki Resources Berhad (AZRB) has released its comprehensive Circular to Shareholders dated 30 April 2026, outlining two critical resolutions for investors:

• Renewal of Shareholders’ Mandate for Recurrent Related Party Transactions (RRPT) of a Revenue or Trading Nature
• Renewal of Share Buy-Back Authority

1. Renewal of Shareholders’ Mandate for RRPT

This renewal allows AZRB and its subsidiaries to continue entering into recurrent related party transactions that are necessary for day-to-day operations and are in the ordinary course of business. These transactions must be conducted at arm’s length, on normal commercial terms, and not more favorable to related parties than to the public, ensuring protection for minority shareholders.

Key RRPT Details

• The RRPT mandate is subject to annual renewal and disclosure requirements. If a transaction exceeds the estimated value by 10% or more, AZRB must make an immediate announcement to Bursa Malaysia.
• Related parties include major shareholders, directors, and persons connected to them, notably Zaki Holdings (M) Sdn Bhd (ZHSB), Dato’ Sri Wan Zakariah, Dato’ Ir. W Zulkifli, and Datin Dr Wan Azfa Farahiah.
• Principal business activities of AZRB Group include civil and structural construction, marine fuel trading, property development, highway management, hotel operations, and more.

Estimated RRPT Values and Actuals

Disclosure and Review Procedures

• Rigorous internal controls and quarterly reviews by the Audit and Risk Committee ensure RRPTs are conducted at fair market terms.
• Directors with interests in RRPTs abstain from deliberation and voting, and connected persons also abstain from voting at AGMs.

Financial Impact and Shareholder Protection

• No foreseeable adverse effect on AZRB’s share capital, net assets, gearing, or earnings.
• Shareholder approval is required at the AGM. Interested Directors and Major Shareholders will abstain from voting.
• Outstanding amounts due from related parties (RM3,661,024) are monitored and deemed recoverable.

2. Renewal of Share Buy-Back Authority

AZRB seeks shareholder approval to renew its authority to repurchase up to 10% of its issued shares, subject to Section 127 of the Companies Act and Bursa Malaysia Listing Requirements.

Key Share Buy-Back Details

• Maximum buy-back is 65,607,828 shares (10% of issued shares as at 1 April 2026).
• Funding will be from internally generated funds, capped by retained earnings (noting accumulated losses of RM191.38 million as at 31 December 2025).
• Treasury shares can be cancelled, retained, distributed as dividends, transferred under employee schemes, or resold.
• Buy-back pricing cannot exceed 15% above the weighted average market price (WAMP) for the five days preceding purchase.
• Public shareholding spread is 47.40%, well above the 25% minimum required by Bursa Malaysia.

Potential Advantages

• Can stabilize share price and investor confidence.
• Allows potential capital gains if shares are resold at higher prices.
• Treasury shares may be used as dividends, employee rewards, or purchase consideration.

Potential Disadvantages

• Reduces financial resources available for dividends or investments.
• May decrease trading liquidity.

Implications Under Malaysian Code on Take-Overs and Mergers

If the buy-back triggers an increase in substantial shareholders’ holdings beyond certain thresholds, a mandatory takeover offer may be required unless an exemption is obtained from the Securities Commission.

Effects on Share Capital, Net Assets, EPS, and Dividends

• If shares are cancelled, total issued share capital will decrease.
• Net asset per share may increase or decrease depending on buy-back price relative to NA per share.
• Earnings per share may rise due to reduced shares outstanding.
• Reduction in cash available for dividends, unless treasury shares are distributed as share dividends.

Historical Share Price Snapshot

Last transacted price as at 1 April 2026: RM0.12

3. Material Litigation Update

AZRB is involved in a significant litigation through its 51%-owned subsidiary Betanaz Properties Sdn Bhd (BPSB), against AEON Co. (M) Bhd regarding breach of tenancy and commercial agreements.

• BPSB claimed RM59.3 million; AEON counterclaimed for refunds totaling RM30.7 million.
• High Court ruling (16 December 2024): BPSB awarded RM18.68 million for wasted expenditure, AEON’s counterclaim dismissed.
• Both parties appealed; AEON’s stay of execution granted upon payment of the judgment sum into an interest-bearing account.
• Appeals heard on 17 March 2026; decision expected on 22 July 2026.

This unresolved legal matter may have a financial impact pending outcome and is potentially price-sensitive.

4. Directors’ Recommendations

• The Board (excluding interested directors) recommends shareholders vote in favor of both the RRPT mandate and the share buy-back authority, citing operational flexibility and shareholder value enhancement.

5. Additional Information

• Documents including company constitution, audited financial statements, and litigation papers are available for inspection at AZRB’s registered office.

Disclaimer

This article is based on the official Circular to Shareholders of Ahmad Zaki Resources Berhad dated 30 April 2026. The information is provided for investor awareness and does not constitute investment advice. Shareholders and investors are advised to exercise caution and consult professional advisors before making any investment decisions, especially regarding unresolved litigations and corporate actions that may affect share value.

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