SEG International Bhd: Key Investor Updates from 2026 AGM Circular

Overview

SEG International Bhd (“SEGi”) has released an important circular ahead of its 40^th Annual General Meeting (AGM), scheduled for 25 June 2026. The circular covers two major proposals:

• Renewal of Shareholders’ Mandate for Recurrent Related Party Transactions (RRPTs)
• Renewal of Authority for Share Buy-Back

These proposals, if approved, may have implications on the company’s operations, governance, and potentially its share price.

1. Proposed Renewal of Shareholders’ Mandate for RRPTs

Key Points

• The RRPTs involve rental payments for SEGi’s campus facilities, notably the campus at Setia Alam. The main related party is Peninsula Education (Setia Alam) Sdn Bhd (a wholly-owned subsidiary of HCK Capital Group Berhad).
• Estimated value of RRPT for the next mandate period is RM9.23 million, up from the previous actual value transacted of RM7.39 million.
• Tan Sri Clement Hii (Group Managing Director and major shareholder), Datin Adeline Hii (Non-Executive Director, daughter of Tan Sri Clement Hii), and Dato’ John Tiong (Executive Director and major shareholder) are directly involved as related parties.
• No outstanding amounts due beyond credit terms as at the latest practicable date.
• SEGi has established procedures to ensure RRPTs are conducted at arm’s length, on commercial terms not more favourable to related parties than to the public, and not detrimental to minority shareholders.
• Audit Committee oversight is in place, and interested directors must abstain from voting both at the Board and AGM.
• If the mandate is not renewed, SEGi may face operational disruption for its schools.
• Mandate renewal will reduce administrative burden, as RRPTs would not require separate approvals for each transaction.

Shareholder Interests and Potential Price Sensitivity

• Transactions with related parties can be price sensitive, especially if they are not conducted at arm’s length or are perceived as benefiting major shareholders over minorities.
• The rental agreement is significant in value—RM9.23 million—and involves directors and major shareholders with substantial direct and indirect shareholdings in SEGi.
• Any changes to the mandate or lapses could disrupt SEGi’s schooling operations, potentially affecting revenue and share value.
• Transparency and governance are key; the Audit Committee’s active oversight mitigates risk but investors should monitor any developments or changes in these transactions.

2. Proposed Renewal of Authority for Share Buy-Back

Key Points

• SEGi seeks authority to buy back up to 10% of its issued shares, a maximum of 82,705,304 shares, funded entirely from retained profits (RM908,000 as at 31 December 2025).
• No SEGi shares bought back in the past 12 months have been cancelled or resold.
• Share buy-back can be price sensitive as it may lead to reduced supply, potential upward pressure on share price, and an increase in Earnings Per Share (EPS).
• Share buy-back may be implemented only if public shareholding spread remains above 25%.
• Buy-back may trigger mandatory general offer obligations under the Malaysian Code on Take-Overs and Mergers if substantial shareholders’ stakes increase above certain thresholds.
• Potential advantages include:
  • More efficient use of financial resources
  • Strengthened EPS if purchased shares are cancelled
  • Potential gains if treasury shares are resold at higher prices
  • Treasury shares may be distributed as dividends
  • Stabilisation of share price
• Potential disadvantages include:
  • Reduced funds for other investments or interest income
  • Reduced reserves available for future dividends
  • Possible reduction in Net Assets (NA) if buy-back price exceeds NA per share
• Proforma impact: If buy-back is fully executed and all shares are cancelled, issued share capital will decrease from 1,265,742,042 shares to 1,139,167,838 shares. Major shareholders’ percentage holdings will increase proportionately.
• Share buy-back is subject to shareholder approval at the AGM.

Share Price Data

• Past 12 months share price range: RM0.605 – RM0.830
• Latest price as at the last practicable date: RM0.640

3. Directors’ and Shareholders’ Interests

• Tan Sri Clement Hii, Dato’ John Tiong, and EduEdge Equities Sdn Bhd are major shareholders and are directly affected by both proposals, with significant direct and indirect shareholdings.
• They will abstain from voting on the RRPT mandate due to their interests.
• No direct interests in the share buy-back proposal except for the inadvertent increase in percentage shareholdings due to capital reduction if shares are cancelled.

4. Other Material Information

• No material litigation, claims, or arbitration pending or threatened as at the latest practicable date.
• No material commitments or contingent liabilities that might impact financial results.
• No material contracts (outside ordinary business) entered in the past two years.
• Documents available for inspection at SEGi’s registered office include the Constitution and the audited financial statements for 2024 and 2025.

Conclusion

Both proposals—the RRPT mandate and the share buy-back authority—are significant for investors:

• The RRPT mandate ensures continuity of SEGi’s campus operations but involves related party transactions that require close scrutiny.
• The share buy-back authority could directly affect share supply, EPS, and potentially share price, especially if executed in full.

Investors should monitor the outcome of the AGM, the implementation of these mandates, and any subsequent announcements, as these matters may be price sensitive and affect SEGi’s share value in the short to medium term.

Disclaimer: This article is for informational purposes only and does not constitute financial advice or a recommendation to buy or sell any securities. Investors should conduct their own due diligence and consult professional advisors before making investment decisions.

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