EP Manufacturing Bhd Issues Key Circular: Shareholders to Decide on Major Corporate Proposals at 30th AGM
Summary of Key Announcements for Investors
EP Manufacturing Bhd (EPMB) has issued a comprehensive circular to its shareholders ahead of its Thirtieth (30th) Annual General Meeting (AGM) scheduled for 25 May 2026. The AGM will be held at Zamrud Room, The Saujana Hotel Kuala Lumpur, Saujana Resort, Shah Alam, Selangor, at 3:00 p.m. Notably, the AGM will table two potentially price-sensitive proposals:
- Renewal and New Mandate for Recurrent Related Party Transactions (RRPT) of a Revenue or Trading Nature
- New Share Buy-Back Authority for up to 10% of Issued Share Capital
1. Proposed Shareholders’ Mandate for Recurrent Related Party Transactions (RRPT)
Details and Rationale
EPMB seeks shareholder approval for the renewal and new mandate to enter into RRPT with key related parties. The transactions, critical for the Group’s day-to-day operations, include the purchase and sale of automotive parts, rental of properties, and other business dealings. The proposal aims to streamline operations, reduce administrative costs, and enhance business efficiency by eliminating the need for repeated announcements and EGM calls for routine transactions.
Key related parties include KB Teknik Sdn Bhd (KBT), Pesaka Nuri (M) Sdn Bhd (Pesaka), and Precious Vision Sdn Bhd (PVSB), all linked to Executive Chairman Hamidon Bin Abdullah and his family. The circular discloses significant anticipated transactions, including:
- Purchase of automotive parts from KBT – up to RM200,000
- Sales of automotive parts to Pesaka up to RM55,000,000
- Rental income and expenses with Pesaka and PVSB amounting to millions of ringgit
The Audit and Risk Management Committee has reviewed and confirmed that the procedures for these RRPT are sufficient to ensure arm’s length dealings and protect minority shareholders.
Shareholder Impact and Price Sensitivity
- Several directors and major shareholders (notably Hamidon Bin Abdullah and Aidan Hamidon) and their connected persons are deemed interested and will abstain from voting on the related resolutions.
- The actual value of transactions could exceed estimates due to economic and business fluctuations, and any significant variance (10% or more) will trigger a Bursa Malaysia announcement.
- While the proposal does not directly affect earnings, net assets, or dividends, it could enhance operational efficiency and reduce regulatory costs, which may be viewed positively by the market.
2. Proposed New Share Buy-Back Authority (Up to 10%)
Key Details and Potential Impact
Shareholders are to vote on a new authority allowing EPMB to purchase up to 10% of its entire issued and paid-up share capital on Bursa Malaysia. The buy-back would be funded entirely from retained profits (currently, the company has an accumulated loss of RM114.46 million as at 31 December 2025, so no buy-back can occur until this reverses). The shares bought back could be cancelled or held as treasury shares for resale or distribution as dividends.
- Potential Market Impact: Share buy-backs typically support share prices by reducing supply and signalling management’s confidence in the company’s value. If shares are cancelled, EPS could improve, potentially boosting valuations.
- Risks: A buy-back would reduce cash balances or increase borrowings, possibly limiting future dividends or investments. The company must not breach the public shareholding spread requirement (minimum 25%).
- Trigger for Mandatory General Offer: The board will ensure that buy-backs do not trigger a mandatory takeover under the Malaysian Code on Take-Overs and Mergers.
Share Price Context
The company provided a full year of share price history. As of 17 April 2026, EPMB shares last traded at RM0.480, within a 12-month range of RM0.330 to RM0.570. Any actual implementation of a substantial share buy-back could support the share price closer to its recent highs.
3. Material Litigation – Significant One-Off Financial Outflow
Investors should note a material litigation case involving Peps-JV (Melaka) Sdn. Bhd., a subsidiary of EPMB. The High Court and Court of Appeal have ruled that Peps-JV must pay VMG Transport (M) Sdn. Bhd. approximately RM3 million in total (including judgment sum, nominal damages, and interest), with the final settlement due by 28 February 2026. This is a one-off outflow and may impact the Group’s cash position in FY2026, though Peps-JV has already made partial payments.
4. Other Important Points for Shareholders
- AGM Details: The 30th AGM will be held on 25 May 2026, and proxy forms must be lodged by 23 May 2026, 3:00 p.m.
- Interested Parties: Executive Chairman Hamidon Bin Abdullah and his family have large direct and indirect holdings and are involved in several related party transactions. They are abstaining from relevant votes, ensuring compliance with Bursa regulations.
- No Other Material Contracts: Other than the litigation, there are no material contracts outside the ordinary course of business in the past two years.
Conclusion: Price-Sensitive and Strategic Developments
Both the RRPT mandate and the share buy-back authority are significant for EPMB’s governance, capital management, and operational flexibility. The large anticipated RRPT volumes, the potential for a substantial share buy-back (once the company returns to profitability), and the resolution of a major litigation could all influence the company’s share price and investor sentiment.
Disclaimer: This article is for informational purposes only and does not constitute financial advice or a recommendation to buy or sell shares. Investors should read the full circular, consider their own circumstances, and seek independent advice before making investment decisions. The information herein is based solely on the company’s official disclosures as at the latest practicable date.
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