20110728 1113 Malaysia Corporate Related News.

KLCI chart reading : downside biased.

Petronas said no deal with joint venture
Petroliam Nasional Bhd (Petronas) has disputed claims by a Malaysian-Iranian-Chinese (MIC) joint venture that they are poised to be awarded a contract to develop a marginal oil field. Earlier this week, it was reported that China's largest petroleum refiner Sinopec Petroleum Services (Sinopec) was poised to take a major stake in a planned RM2.06bn venture to help develop a Petronas marginal oil field located off the coast of Terengganu. At a press conference held on Monday, it was disclosed that under the deal, Sinopec will hold a 40% stake in the consortium, while Sabio Oil & Gas SB (SOG), a unit of Sabio Technology Bhd (STB), and Iranian group International Oil and Design and Construction SB (IODC) will have 30% stakes, respectively. (BT)

Japan's Proto buys MTM Multimedia for RM110m
Japan's Proto Corp is buying MTM Multimedia SB, publisher of Motor Trader and Autocar Asean magazines, for RM109.67m. Proto announced on the Tokyo Stock Exchange yesterday that it is acquiring all 500,000 MTM shares from two individuals. MTM had set a new trend in the Malaysian new and used car classifieds market through Motor Trader, when it started in 1998. The magazine offered the placement of a colour photo of the vehicle that is being put up for sale alongside its relevant details. This opened up a whole new approach to selling new and used cars. (BT)

Lion Forest eyes plantation land
Lion Forest Industries (LFIB) intends to grow its plantation business by acquiring land in Southeast Asian countries to undertake the cultivation of oil palm, rubber and other industrial crops. In a statement to Bursa Malaysia yesterday, LFIB said it was eyeing assets in Indonesia, Cambodia, Thailand, Vietnam, Myanmar and Laos. For a start, LFIB is acquiring close to 10,000ha of plantation land in Cambodia for USD3.9m (RM11.5m) cash from Cambodian government. The purchase will grant LFIB the concession rights for these assets for a period of more than 70 years. (Financial Daily)

Insas provides Ho Hup with RM75m loans
Insas Bhd unit Insas Credit & Leasing SB has extended a RM75m financing facility to Ho Hup construction Bhd subsidiary that will help to lift the property developer out of its financial stress. Interestingly, Insas, which is controlled by Datuk Thong Kok Khee, has emerged as substantial shareholder in IT-based firm Formis Resources, which recently acquired a 20.59% stake in Ho Hup. In an announcement to Bursa Malaysia yesterday, Ho Hup said the company and its 70%-owned unit Bukit Jalil Development SB had accepted the RM75m term loan facility from Insas Credit. The funds will be utilized to redeem and /or refinance a loan from CIMB Bank. (Financial Daily)

AIC, Jotech and AutoV set to merge via share swap
The proposed merger of AIC Corp Bhd, Jotech Holdings Bhd and AutoV Corp Bhd will be done via a share swap that would be priced at a slight premium over the last traded market prices of all three companies, a source close to the deal said. “Shareholders of all three companies will receive shares in a new company that will assume the listed status of one of the three companies, in exchange for their existing shares,” the source explained. Another key aspect of the deal is that Datuk Goh Tian Chuan, who has stakes in all the three companies, will not be selling out but will emerge as a major shareholder of the new company, named Temasek Formation Holdings Bhd (which is not related to Singapore's Temasek Holdings). (StarBiz)

SP Setia unit ends China deal
SP Setia’s subsidiary, Setia (Hangzhou) Development Co Ltd, and Hangzhou Ju Shen Construction Engineering Ltd have terminated their joint-venture (JV) contract for the development of a mixed property project on 25 acres in Zhejiang, China. SP Setia said in a statement to Bursa Malaysia that the conditions precedent set out in the JV contract had not been met as at Wednesday. It was announced earlier that the JV contract was conditional on getting the approval from China's Ministry of Commerce or the approval authority that it entrusted. The first phase of the project, comprising commercial and residential units over five acres, was said to have a gross development value of RM500m. The signing of the contract with Hangzhou Ju Shen to form a limited liability JV company to develop and operate the mixed property development in the growth corridor of XiaoShan, Hangzhou, took place in October 2009. (StarBiz)

CIMB Group Holdings will next week open a representative office in Mumbai, India, and  form a working partnership with the Kotak Mahindra  Group, one of the country's top  banking and financial services group, according to a source. It is also expected to form an  alliance with some partners in Sri Lanka to tap on the burgeoning investment banking  opportunities in the island state.  

• Group CEO  Datuk Seri Nazir Razak said recently that CIMB's strategy for the India,  China and Middle East regions would be to form working partnerhips with established  players there, rather than acquire equity stakes. (BT)   

Property prices in Nusajaya in Iskandar Malaysia, Johor, are expected to rise further as  UEM Land Holdings and Iskandar Investment Bhd (IIB) plan to transform the area into a  "smart+connected" community. In the last five years, property prices had increased by 10- 30% in East Ledang, Nusa Idaman and Horizon Hills in Nusajaya, said UEM GM Zamri  Ibrahim.  

• He said houses sold at RM300,000-plus in Nusa Idaman in 2008 are now selling at more  than RM400,000 each. Those launched in East Ledang  around the same year have  seen price increases of RM500,000 to above RM600,000.   
• UEM and IIB yesterday signed a collaboration agreement with network system provider  Cisco to develop an information and communications technology (ICT) and services  smart city masterplan for Nusajaya. (BT) 

Two leading mobile operators, Vodafone Essar and  Axiata’s Indian associate, Idea  Cellular, are understood to have increased pre-paid tariffs by up to 20 per cent, in line with  the recent move by SingTel’s Indian associate Bharti. According to industry sources, the  tariffs were increased few days ago but the details of new tariff could not be obtained.  (Economic Times of India)

Ingress Corporation has secured contracts worth RM388m, its executive  vice-chairman  Datuk Rameli Musa announced. The contracts, secured by the group's power engineering  and projects division, are expected to contribute to a better performance anticipated by the  group for its current financial year ending Jan 31, 2012. (Bernama, Financial Daily)  

Ingress Corp  has high hopes of participating in the manufacture  of components for Proton Holdings' global small car. "We are interested and I think we have high chance of  being invited to participate. But we have not been informed of anything yet," said executive  vice chairman, Datuk Rameli Musa. (Malaysian Reserve)  

Ingress Corp has submitted tender for several projects including the Ampang line light rail  transit (MRT) extension and RM1.5bn worth of jobs from Keretapi Tanah Melayu (KTM).  Executive vice-chairman cum CEO Datuk Rameli Musa said Ingress had submitted the  tender for KTMB works in March and the results would be announced in September.  (Starbiz)

Syarikat Prasarana Negara Bhd has successfully priced its RM2bn 10-year and 15-year  Islamic medium term notes or sukuk issued yesterday, under its RM4bn nominal value  sukuk programme guaranteed by the Government.

• The sukuk programme is mainly to part-finance the  Kelana Jaya and Ampang LRT  Line Extension Project (LEP) and other infrastructure improvement initiatives by  Prasarana. The sukuk carries a semi-annual profit rate of 4.15% per annum for the  RM800m 10-year tranche and 4.35% per annum for the RM1.2bn 15-year tranche. 
• Due to the overwhelming response from investors, the sukuk was priced at the tightest  end of the final price guidance which demonstrates strong investor appetite and ample  liquidity in the market for high grade papers, reflected primarily by the strength of the  government guarantee for it. (Bernama)    

Japanese steel mills in Malaysia could shift their operations elsewhere if Megasteel Sdn  Bhd gets it way in petitioning to impose additional safeguard measures for imports of  certain hot-rolled coils (HRC). The Ministry of International Trade and Industry (Miti) is  expected to decide on the issue by 29 July but has the right to delay its decision by one  more month. • It is understood that foreign owned steel players are far from happy about the situation  and are prepared to refer the matter to the World Trade Organisation.

• Sumiputeh Steel Centre Sdn Bhd MD H Hank Yoshioka said, “Internationally, steel  import duties are 0-5%. The current 25% imposed in  Malaysia is already higher than  normal and if we need to pay the additional safeguard duty of 35% we will be out of  business.”  
• The Malaysian Iron and Steel Industry Federation (Misif) president Chow Chong Long  said the additional 35% duty will affect a wide range of industries including the electrical  and electronics, automotive as well as other export based manufactures. (Malaysian  Reserve, Financial Daily)    

Deputy Transport Minister Datuk Abdul Rahim Bakri is confident that the ongoing Transport  Ministers meeting of the  Brunei-Indonesia-Malaysia-Filipina-East Asean Growth Area (BIMP-EAGA), at Cagayan De Oro in the Philippines, will result in some form of regional  cooperation in the area of transportation and communications. He said cooperation in the  sector would be necessary and timely as it would be in line with present efforts to create an  Asean community by 2015.

• Abdul Rahim said the growth triangle could become a driving force to establish  cooperation and facilitating the venture into the various economic areas of BIMP EAGA  which has a market potential of 60m people where transportation and communications  were the major drivers. Abdul Rahim also announced  that Kota Kinabalu, Sabah has  been elected as the host for next year's BIMP EAGA  Transport Ministers meeting.  (Bernama)    

Malaysia Airlines (MAS) has restructured its sales unit following the departure of its senior  general manager of sales and marketing Datuk Bernard Francis. MAS has relocated all  heads of regional sales to its headquarters in Subang to ensure better coordination and  quicker response in terms of strategising. “We have restructured (the sales department)  and that position does not exist (anymore),” Tengku Datuk Azmil Zahruddin said.

• He added that “we have a strategy in place (for sales)” but he did not elaborate. Azmil is  also the commercial director for the airline, a position he said he had held for the past  year. (Star Biz)      

Chery Alado, which holds the rights to import and sell Chery cars, plans to invest up to  RM300m over the next five years on a new assembly plant in the country. "Should  everything go according to plan, the plant would make Malaysia the Southeast Asian hub  for Chery's right hand drive models," said CEO Paul Ng.

• Currently, the company sells three Chery models - Eastar, Tiggo and A5. The company,  which sold 3,200 units of vehicles last year, aims to grow its sales by at least 20% to  3,800-3,900 units this year. (BT)      

Favelle Favco Bhd  received letters of intent worth RM79.3m for the supply of offshore  cranes and winches. The purchase orders were given to Favco’s units, namely Favelle  Favco Cranes (M) Sdn Bhd, Favelle Favco Cranes Pty Ltd, Favelle Favco Cranes Pte Ltd  and Favelle Favco Winches Pte Ltd. (BT)

Vale officially opened the HQ of its subsidiary  Vale Malaysia Manufacturing in Perak  where the company intends to create an industrial hub comprising of  a major iron ore  distribution centre and other related industries in Teluk Rubiah. The project will take three  years to complete. Once the distribution centre is operational, iron ore from Brazil will be  transported in Valemax vessels of 400k deadweight tonnage to Teluk Rubiah. From there  the blended ore will be distributed to customers in the Asia-Pacific region such as China,  Japan, Australia and also Malaysia. (Malaysian Reserve)

Admuda Sdn Bhd has signed an MOU with CGS International (Chongqing) Co Ltd to build  a RM160m sugar refinery plant in Kuching.  Admuda director Datuk Raja Sulaiman Raja  Sharif said the new plant would be the first sugar  refinery in Sarawak to cater to sugar  demand in Sabah and Sarawak. He said, “The refinery shall have a minimum production  capacity of 300 mt per day with the anticipatory expansion capability. The refinery should  be completed and delivered to us within 18-24 months and we expect to generate revenue  of RM260-270m in the first year of operation.” (Star Biz)  

Deputy Transport Minister Datuk Abdul Rahim Bakri is confident that the ongoing Transport  Ministers meeting of the  Brunei-Indonesia-Malaysia-Filipina-East Asean Growth Area  (BIMP-EAGA), at Cagayan De Oro in the Philippines, will result in some form of regional  cooperation in the area of transportation and communications. He said cooperation in the  sector would be necessary and timely as it would be in line with present efforts to create an  Asean community by 2015.

• Abdul Rahim said the growth triangle could become a driving force to establish  cooperation and facilitating the venture into the various economic areas of BIMP EAGA  which has a market potential of 60m people where transportation and communications  were the major drivers. Abdul Rahim also announced  that Kota Kinabalu, Sabah has  been elected as the host for next year's BIMP EAGA  Transport Ministers meeting.  (Bernama)