Berjaya Corp: Stock hits by uncertain status of sports betting licence.
Berjaya Corp Bhd's share price slumped to its lowest in more than three months due to the uncertainty over the sports betting licence status of Ascot Sports Sdn Bhd.
The stock fell 6.2 per cent, or 9 sen, to close at RM1.37 yesterday. It was the third most active stock traded on the exchange.
Tan Sri Vincent Tan's BCorp (3395) was planning to buy 70 per cent of the privately-held Ascot for RM525 million. Ascot was granted the sports betting licence last month, but this has been met with mixed reaction from various groups, with most of them opposing the move.
On Monday, the Finance Ministry said it might review the decision to allow sports betting and a final decision would be made next week after gathering public feedback.
Losing out on the licence would be the second significant setback for Tan this year, after plans to set up a manufacturing plant in Malaysia to build right-hand-drive cars for the Asean market hit a wall, also due to licensing issues.
BCorp was planning to make the 1-litre cars for BYD Auto Co Ltd, a Chinese carmaker partly financed by Warren Buffett's Berkshire Hathaway.
In February, Business Times reported that the government did not plan to relax rules under the National Automotive Policy, which only allows new manufacturing licences for cars of 1.8 litres and above.
Nevertheless, BCorp is still in the running for a lottery project in Vietnam, which will make it the first non-Vietnamese state-owned company to run a lottery business.
In the year ended April 30 2009, BCorp suffered a net loss of RM53.38 million despite posting RM6.33 billion sales.
The major driver to group sales was the gaming business led by Berjaya Sports Toto Bhd, which contributed RM3.69 billion, followed by RM1.49 billion from the marketing business led by Cosway Corp Bhd.
Currently, BCorp has about RM3.9 billion debts and, according to an AmReserach report, aims to raise RM800 million by selling its non-core assets next year.