CAM Resources Berhad: Major AGM Proposals Could Impact Share Value

Overview

CAM Resources Berhad has released a comprehensive circular in advance of its 25th Annual General Meeting (AGM) scheduled for 18 June 2026. The document outlines two key proposals: a renewal of the shareholders’ mandate for recurrent related party transactions (RRPT) and renewal of the authority for share buy-back of up to 10% of issued shares. Both proposals are crucial for investors to understand, as they may impact the company’s operations, governance, and ultimately, the share price.

Highlights of the Proposals

1. Proposed Renewal of Shareholders’ Mandate for RRPT

• Nature of Transactions: The RRPT involves purchases of building materials and metal fabrication equipment and products by Central Palm Oil Mill Sdn. Bhd. (a subsidiary of CAM) from Hia Union Engineering Sdn. Bhd. (HUE), a company where Mr. Hia Wan Kiga, an executive director and major shareholder of CAM, also holds a substantial interest.
• Estimated Value: The estimated value of these RRPTs for the mandate period is RM3 million, with transactions expected to be monthly. This is unchanged from the previous mandate period.
• Price and Terms: All transactions are to be conducted at arm’s length, on commercial terms not more favourable to related parties than to the public, and not detrimental to minority shareholders.
• Review Procedures: Multiple controls are in place, including regular audit committee review, comparison with third-party pricing where possible, maintenance of a RRPT register, and annual internal audit reviews.
• Director Interest: Mr. Hia Wan Kiga will abstain from board deliberations and voting on this mandate, and has undertaken to ensure persons connected to him also abstain from voting on the relevant resolution.
• Financial Impact: The RRPT mandate is not expected to have any material effect on the issued capital, substantial shareholdings, net assets per share, or earnings per share of CAM.
• Validity: The mandate, if approved, will remain in force until the next AGM or until revoked by shareholders.

2. Proposed Renewal of Share Buy-Back Authority

• Scope: Authority to purchase up to 10% of the company’s issued shares (up to 19,680,000 shares based on current issued capital), inclusive of shares held as treasury shares (currently 14,167,256 shares).
• Funding: Buy-back will utilise internally generated funds and/or external borrowings, not exceeding the company’s retained profits (RM36,084,341 as at 31 December 2025).
• Treatment of Purchased Shares: Shares bought back may be cancelled, held as treasury shares, resold on Bursa Malaysia, distributed as dividends, transferred under employee share schemes, or used as purchase consideration.
• Share Price Data: Over the past 12 months, CAM shares traded between RM0.2300 and RM0.3550, with the last price at RM0.3200. Share buy-backs historically can support share price stability.
• Potential Effects:
  • Positive: May reduce share price volatility, enhance investor confidence, increase EPS if shares are cancelled, and allow for strategic use of treasury shares.
  • Negative: May temporarily reduce the group’s financial resources, potentially forego other investment opportunities, and reduce working capital.
• Shareholding Impact: Buy-back may increase the percentage shareholdings of major shareholders and directors, but the company will ensure public shareholding spread remains above 25% as required by Bursa Malaysia. No substantial shareholder’s holding will exceed 33%, avoiding a mandatory general offer under the Malaysian Take-Overs Code.
• Historical Activity: No purchases, resales, transfers, or cancellations of treasury shares in the preceding 12 months.

Material Contracts and Litigation

• Material Contracts: Recent material contracts include disposal of a property for RM700,000 and the sale of equity interest in Naprogen Sdn. Bhd., now an associate company.
• Litigation: CAM and its subsidiaries are not engaged in any material litigation, claims, or arbitration.

Important Considerations for Shareholders

• Price Sensitivity: Both proposals—particularly the share buy-back authority—have the potential to influence the share price by affecting supply, demand, and EPS. The RRPT mandate ensures operational efficiency but does not materially impact financials.
• Governance Safeguards: Directors and connected persons with interests will abstain from voting, and the audit committee maintains oversight, mitigating potential conflict-of-interest concerns.
• Voting Instructions: Shareholders must vote on these resolutions at the AGM. Proxies can be appointed, and forms must be lodged by 16 June 2026.
• Transparency: All RRPTs and share buy-back activities will be disclosed in annual reports and Bursa Malaysia announcements if thresholds are exceeded.

Conclusion

The upcoming AGM and the renewal of these mandates are significant for CAM Resources Berhad. The share buy-back authority, in particular, could support the share price and enhance shareholder value if executed prudently. While the RRPT mandate ensures operational continuity with established suppliers, it is not expected to have a material financial impact. Investors should monitor AGM outcomes and subsequent company actions, as these could influence CAM’s share price and market perception.

Disclaimer

This article is for informational purposes only and does not constitute investment advice or a recommendation to buy or sell any securities. Shareholders and investors are advised to read the full AGM circular and consult with professional advisers before making any investment decisions. The information presented is based on company disclosures and may be subject to change.

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