20100421 1258 Malaysia Corporate News.

Splash has made a revised offer to the federal government and Selangor state government to take over all the water concessionaires in Selangor. The acquisition price of RM10.8bn is unchanged from Splash’s previous offer on 24 Mar 10. Structurally, the takeover offer now comprises PAAB’s RM8.1bn offer topped up by Splash’s offer of RM2.6bn. The revised offer is in response to the federal government’s view that Splash’s previous takeover offer did not meet the conditions under the Water Services Industry Act (WSIA) where water operators should be asset light. Post acquisition, Splash will undertake a sale and leaseback agreement of the assets with PAAB at 6% p.a. with annual escalation of 2.5%. Splash will operate the 30-year O&M concession/licence. (BMSB)

EON Bank said its business continues to run as usual despite "all the noises" surrounding the bank following the takeover bid by Hong Leong Bank and the possibility of Affin Holdings getting into the picture. Its group CEO Michael Lor said the bank has never slowed down its business and expects to continue to record strong growth this year. "Business as usual for us. Nothing has changed," he said. Lor said the Hong Leong takeover offer will be tabled at the company's annual general meeting and extraordinary meeting which is expected to be held in late May or early June. When asked to comment on Affin's interest over the bank, he said no official offer has yet to be made. (BT)

A number of local investment banks are in the midst of preparing proposals to secure the mandate to handle the IPOs of Malaysia Marine and Heavy Engineering and Petronas' petrochemicals business. It is understood that among those Petronas issued a request for proposal are the investment banking arms of CIMB, RHB, Maybank and AmBank. The deadline for submitting the proposals is sometime next week and that the banks would be assessed on their broad approach to the IPOs. (Star)

Supermax Corporation's executive chairman and group MD Datuk Seri Stanley Thai said the robust global demand coupled with constraints in expansion has helped boost the profitability of rubber glove manufacturers in Malaysia and should continue at least for the next one-and-a-half to three years.

• He said that rubber glove manufacturers were set to see a spike in demand by July this year after seeing a drop in orders in recent months. The demand dropped as customers, especially the multinationals (MNCs), had reduced their orders because of the high latex price, he said. 
• He said the latex price, which was now around RM7.71/kg, was expected to fall to between RM5.50-RM6.00/kg going forward. Thai said latex prices were expected to start dropping in May or June as by then, the wintering season will be over with latex production seeing an increase.
• As for expansion, Thai said such plans remained slow in the glove industry due to nonavailability of natural gas for all new project sites as Gas Malaysia Sdn Bhd had not committed to capex for pipelines. He said unless the government intervened, Gas Malaysia was unlikely to invest in infrastructure for new industrial project sites, while in existing sites such as Klang, Selangor, the pipeline had reached maximum utilisation. As result, many glove manufacturers were resorting to alternative fuel such as biomass. (Bernama)

All public service projects and programmes costing over RM50m under the 10MP will require value management analysis to ensure they provide value for money, Tan Sri Nor Mohamed Yakcop said. He expected the Government to save at least 20% overall with the implementation of the new system. All government agencies submitting proposals to the EPU for projects under the 10MP would also have to list the total cost including the cost of operating and maintaining them. He said the EPU also wanted to avoid cases it encountered previously where a project failed to take off despite the funds being given to the agency concerned. (Star)

Proton Holdings is optimistic of recording 6 to 7% growth in sales this year on improved consumer sentiment and demand for its core models, launches of improved version of existing models as well as unveiling of all-new models. "We are looking at 6 to 7 per cent growth in our own volume alone from the domestic market. We are quite happy based on the current customer demand, and are quite confident we can see another growth year for Proton in the domestic market. "But, I think the focus will be more on the overseas market, which we are pushing very hard. And I believe this year, there will be another big growth for our export drive," its MD Datuk Syed Zainal Abidin Syed Mohamed Tahir said. (BT)

Malaysia’s palm oil exports fell 9.1% in the first 20 days of April compared with the previous month, estimated Societe Generale de Surveillance, an independent cargo surveyor. A total of 767,251 metric tons of palm oil were tracked April 1-20, SGS said. Malaysia exported 844,474 tons of palm oil during the same period in March, according to the surveyor. (Bloomberg)

Indonesia’s palm oil exports in March fell 9% from a month earlier to 1.06m tons, the nation’s palm oil association said in an e-mailed statement today. (Bloomberg)

Palm oil producers from Indonesia and Malaysia plan to meet in Kuching, Malaysia, early next month to discuss a strategy for tackling challenging environmental and labor issues which threaten to hinder the development of the multi-billion dollar industry. In March, producers from the two countries signed a memorandum of understanding in which they agreed to collaborate and improve communication to counter the impact of industry critics and to improve sustainability. Daud Darsono, president director of PT Sinar Mas Agro Resources and Technology, said producers will meet in Kuching to follow up on March’s agreement. (Jakarta Globe)

DRB-HICOM’s defence arm, DRB-HICOM Defence Technologies has received a letter of intent (LOI) from the Government to manufacture 257 units of 8X8 armoured wheeled vehicle for the usage of Angkatan Tentera Malaysia worth about RM8bn. Chairman Datuk Seri Mohd Khamil Jamil said the project value, as disclosed by the Government, was subject to commercial and technical terms between both parties as the project would span six years. “We will deliver the 257 units of 8X8 armoured wheeled vehicle to the Government by 2016. The company will come out with the first vehicle by January 2012,” he added. (Starbiz)

Mah Sing Group said it is "actively" scouting for more land at home and abroad, either via outright sales or joint ventures with land owners. It also expressed interest in participating in the government's tender process for several parcels of land in Jalan Stonor, Jalan Ampang, Jalan Lidcol in Kuala Lumpur, that will be developed by the private sector as well as the development of 1,200ha in Sungai Buloh into a new hub for the Klang Valley by the government and the EPF. (BT)

Malaysia Airlines is evaluating the potential of allowing wholly-owned FlyFirefly to operate its B737-400 planes when it replaces its fleet gradually from the end of this year. The national carrier will receive three of its B737-800 this year and the next. It will also receive five A330-300 and another five A380 next year. Sources said that Firefly would either lease or buy up to 35 of the used MAS jets, and would use the aircraft for shortrange domestic and regional routes. The plan is expected to take off from December this year until the end of 2013 when MAS stops using the B737-400. Firefly may either operate the Boeings from the KL International Airport (KLIA) or the new Low-Cost Carrier Terminal (LCCT). (BT)

Standard Chartered has appointed Sean Wallace as Group Head of Origination and Client Coverage (OCC) with immediate effect. He will continue to be based in Singapore. Reporting to Mike Rees, CEO of Wholesale Banking, Sean will lead the Bank's Origination and Client Coverage Group, which shapes the client-centric strategy of deepening client relationships across its key markets. (Bernama)

Citibank expects to record strong double-digit growth in revenue this year, driven by new branches and offerings. Its CEO Sanjeev Nanavati said the bank plans to grow and expand aggressively across all businesses in Malaysia. "We expect significant growth opportunities this year, with branch expansion and increased autoteller machine touch points," he said. Sanjeev said Citibank's growth strategy in the country will be three-pronged, namely physical, virtual and digital.

• Its four new branches in Taipan USJ, Bandar Tun Hussein Onn in Cheras, Malacca and Kuantan will extend Citibank's network to 11 from seven now, following the authorisation given by Bank Negara Malaysia in 2009. In addition to branch expansions, Sanjeev said the bank will further enhance its mobile and Internet banking platforms to reach more Malaysians and support the growth of virtual banking platforms. (BT)

British American Tobacco (Malaysia) said it has lined up strategies to counter the impact of a new rule that bans the sale of small packs starting June 1 this year. "This will be another challenging year for different reasons, but we have been preparing as we are aware of this for a long time," finance director Stephen James Rush said. "We need to convince the customers of Dunhill 14s not to change brand by giving them extra features. We have successfully launched the Dunhill Reloc, and there are other plans too. We believe we can meet the challenge."

• Reloc is a new pack design with a resealable feature to keep the cigarettes fresh, which may help convince customers to convert to the bigger packs of 20s, especially since they are cheaper for every stick. 
• BAT had estimated that it will lose RM80m in operating profit a year once the new rules kick in requiring it to withdraw cigarette packs with fewer than 20 sticks. (BT)

Ramunia Holdings, which has just sold its main asset, expects to be back in the black and free from the PN17 status this year as it partners shipbuilder Coastal Contracts. It plans to continue with the engineering business, servicing the oil and gas industry, despite selling its fabrication yard in Johor to Sime Darby for RM515m, says Ramunia director Too Kok Leng. Coastal offers a wide range of marine services and vessels to worldwide clients of different industries and has a fabrication yard in Sandakan, Sabah. "It is a good marriage. We have the licence and expertise, and Coastal has a yard. So we are complete in that sense", says Too. (BT)

Scomi Marine is on the lookout to expand its business through acquisitions. "We are looking at opportunities to acquire additional assets. However, we will look at the returns (on investment) carefully," said president Mukhnizam Mahmud. The company will look for companies in which it will be able to take a majority stake to maximise shareholders' return. Shareholders yesterday approved Scomi Marine's bid to dispose of its 29.07% stake in CH Offshore to Falcon Energy Group for RM348.7m to pare down its debts. (BT)

Axis REIT Managers (ARMB) announced that OSK Trustees, the trustee of Axis Real Estate Investment Trust (Axis-REIT) has entered into an agreement with Zone Capacity with regard to a property acquisition in Tanjung Kupang, Johor Bahru. Axis-REIT had proposed to acquire the unexpired 44 years 11 months sub-lease interest of a portion of land in Tanjung Kupang known as Plot D8 at Distripak A, Pelepas Free Zone, for RM30m. (Bernama)