20110822 1117 Malaysia Corporate Related News.

Telekom Malaysia Bhd 2Q results to show pick-up in Unifi subscribers
Telekom Malaysia Bhd’s (TM) results for its second quarter ended June 30, 2011 (2QFY11) are expected to reveal increased pick-up subscribers for its high-speed broadband (HSBB) Unifi and a slight drop in capital expenditure. At the moment, Unifi’s customer base stands at around 135,000 users. In addition, TM is also stepping up its efforts to increase its presence among small and medium enterprises (SMEs). The company has acknowledged that the segment is ‘difficult’ but with great potential. –The Edge

Malaysian Resources Corp Bhd Eyes more rail jobs
Malaysian Resources Corp Bhd (MRCB), which have clinched a couple of contracts related to Ampang and Kelana Jaya light rail transit (LRT) extension projects, will continue to bid for other packages of the LRT extension as well as the mass rapid system (MRT), its chief executive officer Datuk Mohamed Razeek Hussain said. Last Tuesday, MRCB, through its subsidiary, MRCB Engineering Sdn Bhd (MESB) won a contract worth RM1.3bil for the Ampang LRT extension from Syarikat Prasarana Negara Bhd (SPNB). MESB also secured a sub-contract worth RM67.2mil from Sunway Construction Sdn Bhd, for the fabrication and delivery of segmental box girders for the Kelana Jaya LRT extension. These are the first of a series of major packages awarded under the two LRT extension projects.  According to Razeek, the company will handle the job on its own without third party involvement. He also said that the award has boosted their construction order book enormously, from the current outstanding works of over RM1.0bil to about RM2.6bil. For the RM52.0bil MRT project, Razeek said MRCB has been named by SPNB as one of 28 shortlisted individuals and joint-venture companies eligible to bid for various elevated civil works, station and depot packages. He said out of the 18 work packages, MRCB has been shortlisted for eight packages under elevated civil works. – Business Times

Production at Tan Chong Motor Holdings (TCMH)'s assembly plant in Segambut is being  ramped up to meet the rising volume of brands owned by its sister companies. In view of  this, the group has decided to defer its property development plan for the tract on which the  assembly plant is located, says Datuk Ang Bon Beng, executive director of Edaran Tan  Chong Motor. Ang says TCMH is aiming to double its market share in the country to 10%  from 5.6% currently with aggressive model launches  backed by principal Nissan Japan.  (Edge Weekly)

In an interview,  Dialog’s executive chairman and co-founder Ngau Boon Keat revealed  that the recently-announced rights issue, which will raise up to RM640m funds, is not for  the financing of the Balai marginal field or the Pengerang tank terminal. Instead, the  intention is to arm Dialog with more financial resources to take up future projects.

• In addition to Malaysia, Dialog is eyeing upstream  opportunities in  Thailand and  Indonesia.   
• Ngau believes that risk-sharing contracts (RSC) are good for the sector and the country  for two reasons 1) Petronas owns the marginal fields and is therefore able to enjoy the  upside potential of the oil price. 2) The RSCs provide  good training ground for local  companies through partnerships with foreign players.   
• Some RM90bn worth of downstream investments, i.e. oil refineries and petrochemical  plants, are expected to flow into Pengerang, where Dialog is undertaking a 7-year tank  terminal construction project. The terminal is expected to complement Singapore’s.   (Edge Weekly)     

Malaysia, which has become an investment magnet for global  solar panel  manufacturers,  is expected to see its latest addition tomorrow. A  US-based company, which will ink a deal with Senai High-Tech Park Sdn Bhd, is expanding its operations in this part of the world, and Malaysia serves as an ideal location. Prime Minister Datuk Seri Najib  Razak is expected to witness the signing of a memorandum of understanding (MoU)  between the new investor and Senai High-Tech Park, the developer of the high technology  park located within Iskandar Malaysia. First Solar and SunPower of the US and Q-Cells of  Germany are among the significant investors in the solar technology industry.(BT)  

Tenaga Nasional shares, which have been on a downtrend since Monday, extended their  losing streak yesterday after the company issued profit and dividend warnings following the  severe impact of gas curtailment by Petroliam Nasional Bhd.  President and CEO Datuk  Seri Che Khalib Mohamad Noh said that the utility giant was incurring an additional  RM400m a month to replace the shortfall in gas.

• He issued a profit warning as the additional high fuel costs continued to eat into TNB's  cash flow. “Our policy is to pay 60% of our free cash flow as dividend for our  shareholders. However, we may not be able to pay the same level of dividend we paid  last year as the high fuel cost is putting a strain on our free cash flow,” Che Khalib  added. (Starbiz)      

Tenaga Nasional is proposing that first generation power contracts are allowed to expire  and an open bidding process be used to replace the lost capacity. "To me, the PPA (power  purchase agreement) renegotiations did not bring any results. It is probably time for the  parties to decide what to do," TNB CEO Datuk Seri Che Khalib Mohamad Noh said in an  interview recently. Apart from the failed two rounds of talks, the scarcity of gas is also a  factor. (BT)  

Sarawak Energy Bhd’s (SEB) plan to offer attractive power tariffs to industries is aimed at  attracting investments into the Sarawak Corridor of Renewable Energy (Score).

• SEB was likely to offer tariffs to energy-intensive industries in the Samalaju Industry  Park, Bintulu that would be some 50% lower than the average price offered by China to  the aluminium industry there. (Star Biz)    

The enlarged Sunway Bhd has been offered a sizeable piece of land in India for a  possible township development, says Sunway group founder and chairman Tan Sri Jeffrey  Cheah. The development will be in one of India's "major cities". He, however, declined to  disclose more details because no agreement has been finalised.  In a recent interview,  Cheah said while India is a country with vast opportunities for the Sunway group, moving  forward, it will be Singapore and China that it would like to focus on.

• "We expect some 30-40% from our bottomline to come from China and Singapore by  2015," he said, adding that despite the size of Singapore, Sunway still finds a lot of  opportunities in the island.   
• In China, the group has signed a collaboration agreement to participate in the  development of Tianjin Eco-City with master developer Sino-Singapore Tianjin Eco-City  Investment and Development Co Ltd for a RM5bn gross development value (GDV)  project in Tianjin Binhai New Area. Sunway was chosen to be the only Malaysian  developer with other top regional developers, which include among others Singapore's  Keppel Land, Taiwan's Farglory Group and Japan's Mitsui Fudosan.(BT)    

The shares of Sunway City Bhd (SunCity) and Sunway Holdings Bhd would be delisted  from the Main Market of Bursa Malaysia on Aug 23. The merger, which was announced  last Nov, involved cash and share swap of RM4.5bn made by Sunway Sdn Bhd, a  company controlled by Tan Sri Jeffrey Cheah. The new entity would be known as Sunway  Bhd. (BT)  

Commercial banks, which are currently shying away from lending to green companies,  may have to set aside an allocation to finance green technology projects.  Malaysian  Green Technology Corp (MGTC) CEO Dr Nazily Mohd Noor said this was one of the  suggestions made during a discussion at the  Green Technology and Climate Change  Council, chaired by the PM Datuk Seri Najib Razak, two weeks ago. "We voiced out this to  the Prime Minister about the difficulties companies are facing to obtain loans pertaining to  green projects and he (Prime Minister) immediately instructed the Ministry of Finance  (MoF) to speak to Bank Negara to look into the matter and to also provide quotas for banks  to adhere to when giving out green loans. (BT)  

Christian Kwok-Leun Yau Heilesen and Raymond Yip Wai Man, who held a 15.04% stake  in  DVM Technology Bhd,  are no longer substantial shareholders of the company.  Heilesen and Yip, who bought a 6.85% and 8.19% stake in the company respectively on  Aug 4 and then increased their stakes to 9.46% and 10.43% on Aug 12, have pared their  stakes.Heilesen disposed of 8.35m shares on Aug 15, reducing his stake to 4.71% in the  company while Yip disposed of 9.8m shares on the same day, reducing his stake to 4.85%.

• Soon after they bought into the company, the duo both Hong Kong residents had sought to remove all four existing directors and appoint new ones. The four directors of DVM the  duo wanted out were Datuk Goh Kian Seng (also the group managing director), Tan Sri  Abdul Rahman (chairman), Kamaruddin Ngah and Lee Keat Hin.   
• On the same day they made the moves to remove the directors, DVM announced that  the company would undertake a private placement representing about 10% of the share  capital of the company to third-party investors by issuing 7.6m new shares at an issue  price of RM0.14/share with the proceeds of RM2.4m to be used for working capital.   
• This was seen by Heilesen as an attempt by existing major shareholders to dilute  Heilesen and Yip's stakes.(BT)    

Container lines may miss their peak-season targets on Asia-US routes as orders for  backpacks, sneakers and flatscreen TVs fall below expectations and ships sail below  capacity. Christmas shipping may be the same. (Bloomberg)  

Malaysia Rating Corp (MARC) has downgraded its ratings on  Tanjung Langsat Port  Sdn Bhd's  RM250m sukuk musyarakah bonds and RM135m musyarakah commercial  papers/medium-term notes programme (MCP/MMTN) to AIS and MARC2ID/AID from AAIS  and MARC1ID/AAID respectively.

• The outlook on the ratings remains negative. The downgrades reflect further erosion of  Tanjung Langsat Port's credit and operating profile during 2010 due to the still lingering  effects of the 2008 fire incident at its tank terminal complex and its depleting  unencumbered land bank.   
• In light of its depleted unencumbered land bank and current operating challenges,  MARC expects Tanjung Langsar Port to become increasingly dependent on liquidity  support from parent, Johor Corp (JCorp), to fund cashflow and debt service shortfalls.   
• MARC has been informed that the remaining two tanks which were earlier damaged by  fire should be ready to resume operations by end-2011. (BT)    

AirAsia has settled its outstanding airport charges with Malaysian Airport (MAHB), said  to be over RM100m. The matter was raised by certain quarters when the low cost carrier  entered into a share swap with MAS. (Malaysian Reserve)  

Marine and Heavy Engineering Holdings (MHB) has been awarded two contracts  amounting to RM952m by MISC. The contracts were for topsides fabrication, marine repair  and conversion of two energy vessels (Malaysian Reserve).  

Miri-based Shin Yang Shipping expects to complete its RM266m fleet expansion program  by the end of next year. The 11 vessels of different types are currently under construction  to cater for increasing demand. (Star Biz)  

Glomac says it may bid for contracts to develop the Kuala Lumpur International Financial  District (KLIFD) with its partner, the Al Batha Group. Group MD cum CEO Datuk FD  Iskandar FD Mansor said Glomac is also keen to work on Bandar Malaysia, a KLIFD twin  development in Sungai Besi, and the 1,335-hectare rubber research institute land in  Sungai Buloh. "We have not submitted any proposals  for these projects but would be  interested if we are invited," Iskandar added. (BT)

SunCity and Sunway: To be delisted. The shares of Sunway City Bhd (SunCity) and Sunway Holdings Bhd would be delisted from the Main Market of Bursa Malaysia on Aug 23. The new entity would be known as Sunway Bhd. (Source: Bursa Malaysia)

Crescendo: Plans RM2.5b township. Crescendo Corp Bhd (CCB) is set to launch its new mixed development property project, Bandar Cemerlang township in Mukim Tebrau, Johor Baru with a gross development value (GDV) of RM2.5b by year-end. The completion of the Johor Baru-Kota Tinggi highway in June this year has improved accessibility and connectivity to its project. (Source: The Star)

Property: Foreigners not shying away from prices. Malaysia property products are currently hot on the radar of international investors and property buyers, in view of the domestic real estate market potential to see a steady growth in prices. (Source: The Malaysian Reserve)

EPF: Confirms buying London office block for RM740m. The Employees' Provident Fund (EPF) has confirmed that it has purchased an office block in St James's Square, London, where one of the tenants has one of London's highest rents, for RM740m. This marks EPF's fourth property investment in London since announcing an allocation of RM1b for British property purchases about a year ago. Including this latest purchase, it has spent RM634m. (Source: The Star)