Thursday, December 15, 2011

20111215 1048 Malaysia Corporate Related News.

Johor Corp, CVC Capital launch takeover of QSR, KFCH
Johor Corporation and CVC Capital Partners Asia III Ltd have teamed up to take over QSR Brands and KFC Holdings Malaysia (KFCH). Johor Corp and CVC Capital made the offer via a special purpose vehicle Massive Equity SB (MESB) in which Johor Corp holds a 51% stake and CVC Capital 49%. MESB offered RM6.80 for the shares in QSR Brands and RM3.79 for the warrants. At RM6.80, this is 80 sen above the closing price of RM6 on Tuesday, while the offer price for the warrants was a premium of 77 sen from the closing price of RM3.02. MESB also made an offer to KFCH of RM4 per share and RM1 per warrant. (Financial Daily)

Sime Darby buys part of Caterpillar distribution biz for RM1.1bn cash
Sime Darby’s industrial division buys Caterpillar Inc’s former Bucyrus distribution business, involving mining machinery, in Australia, Papua New Guinea and New Caledonia for USD360m (RM1.1bn) cash. Sime Darby said on Wednesday the acquisition would enable its industrial division to strengthen its position in the mining industry by offering a wider range of mining equipment and services to its customers. (Financial Daily)

Naza joins in race for Proton
The Naza Group, the country’s biggest privately-held automotive group, made a closed-door presentation to Khazanah Nasional yesterday to buy its stake in Proton Holdings. The presentation came just a day after UMW Holdings made a similar presentation to the government’s investment fund. The other bidder for the national carmaker is DRB-HICOM, the country’s biggest publicly-traded automotive company. (BT)

RM1.4bn capex plan for SapuraCrest Kencana
Sapuracrest Petroleum plans to spend RM1.4bn in capital expenditure (capex) in the next two years. It will be used for buying new vessels and as part of SapuraCrest's new investments and expansion plans. SapuraCrest is merging with Kencana Petroleum to create Malaysia's oil and gas (O&G) largest player by assets. (BT)

SapuraCrest's shareholders have given the go-ahead for its merger with  Kencana with 99.5% in favour of the deal. Shareholders also approved  SapuraCrest's acquisition of Australia-based Clough's marine construction and  offshore engineering operations in Australia, UK and US for RM409m cash.  executive vice chairman Datuk Seri Shahril Shamsuddin said that moving  forward, SapuraCrest will focus on streamlining its operations with Kencana  and expanding its workforce, adding that the oil & gas business is coming off  its base and poised for an upswing. Kencana's shareholders are scheduled to  vote on the merger today. (Star)

Khazanah Nasional should not sell its entire stake in  Proton as this would  trigger a mandatory general offer and affect the potential buyer’s ability to turn  the national carmaker around, Tun Dr Mahathir Mohamad said. ―I’m not okay  with it... (because) the cost will be very high for whoever buys,‖ he said. ―And  when the cost is very high, turning it around becomes very difficult because  whoever buys it will have to inject more money into Proton, maybe inject  another RM2bn.‖  This high initial capital expenditure may affect Proton’s revival plans in  the long term unless the buyer was  ―very strong‖ financially and could  manage spending well, Dr Mahathir pointed out. (Malaysia Today)

Malaysia Competition Commission (MyCC) will officially look into the  deal between Malaysia Airlines (MAS) and AirAsia when the Competition  Act comes into effect on Jan 1 next year. However, CEO Shila Dorai Raj said  neither MAS nor AirAsia had submitted any report to MyCC. MyCC received  several complaints from consumers, especially during its road show in Sabah  and Sarawak recently. "Our priority is the consumers. We will investigate the  deal next year onwards. From our initial analysis, we think there could be  something," she told reporters.  Yesterday, International Chambers of Commerce (ICC) organised the  "ICC Malaysia CEO Business Luncheon Talk on Competition Act 2010:  An Insight into What to Expect". The Competition Act is to prevent  business monopolies or cartels. It will apply to all commercial activities  undertaken within and outside Malaysia that affect competition in the  country. The Act will provide a regulatory framework including powers  to investigate, adjudicate and impose penalties. (BT)

Malaysian Airline (MAS) will axe eight loss-making routes under its route  rationalisation exercise which will take effect early 2012. The withdrawal was  based on internal profitability and yield analysis. This account for almost 12% of  passenger capacity and the ongoing route rationalisation will improve loads,  improve yields and have a profit impact of RM220m to RM302m for 2012.  (Financial Daily)

Qantas should base its Asian operations in Malaysia rather than Singapore if it  is serious about expanding in the region, said  Tan Sri Tony Fernandes.  ―Singapore is the better business hub for sure, but the majority of Singapore  traffic is transit traffic  – just like Dubai. Whether you connect in KL or  Singapore, the key is connectivity,‖ adding that Qantas would have lower costs if  it chose Kuala Lumpur. (BT)

The additional costs and delays to  KLIA2 can be blamed on  Malaysia  Airports’ (MAHB) decision to move the new low-cost terminal from its original  northern site to the current spot in the west,  Tony Pua said. This was due to  poor soil conditions at the new site as noted in the 1992 KLIA Masterplan,  estimating that earthworks alone accounted for about RM1.2bn of the additional  RM1.9bn in additional cost. The report clearly says don’t build anything here.   Pua pointed out the move to KL IA West meant a third runway had to  be built for RM270m and also the construction of a second control  tower for RM500m, the only modern airport in the world with two  control towers. (Malaysian Insider)

Tenaga Nasional Bhd (TNB) expects 2012 to be a challenging year in the  midst of increasing demand for electricity and the shortage of gas supply, said  its VP of planning, Datin Roslina Zainal. However, she was confident the gas  problems would be resolved by next July when Petronas' regasification terminal  in Melaka was ready. "We are hopeful the government will allow the present cost-sharing  mechanism to continue until the problem is resolved". Moving forward,  she said, TNB will focus on the local front where the competitive  bidding for 4,500MW of new generation by 2016-2017 would  commence early next year. She said although the LNG bought by Petronas for its regasification  terminal in Melaka was at market prices, the price of gas paid by the  power sector would not reach market prices by 2012. "This is not  expected to be a major problem since LNG makes up a smaller portion  of gas for the country and indigenous gas will still be available," she said.  (Bernama)

The proposed cost-sharing mechanism agreed to by the government addresses  the cost incurred by using alternative fuels up to Oct 2011, said  Tenaga  Nasional Bhd VP of  planning, Datin Roslina Zainal. However, the power  sector experienced gas shortage in Nov and was continuing this month, thus  Tenaga is still using alternative fuels to power its gas plants.  She said, "Tenaga has brought up this matter to the government,  requesting the cost sharing mechanism be put in  place until the gas  shortage problem is overcome". At the current level of gas volume  supplied to the power sector, Tenaga would need to incur additional  cost of between RM300-400m a month, which was unsustainable. She said that officers from Petronas, Energy Commission and Tenaga  would be involved in the review process to ascertain the cost incurred  by using alternative fuels. The process was envisaged to start by  mid-Dec 2011 after the Economic Planning Unit gave the mandate to  the Energy Commission to act as witness for this matter.  "The documents, which are being reviewed, will date from Jan 2010  until Oct 2011 and therefore, the review process will take some time  before it is completed," she said. Roslina said the mechanism for review  and audit would  be similar to the way it was done in 2002 under a  cost-sharing mechanism.  "Tenaga is confident this process will proceed smoothly since the  documents are ready for review by Petronas and the Energy  Commission." The exact figures will be finalised once the review process  is completed," she said. (Bernama)

RHB Capital and  OSK group will soon submit to Bank Negara Malaysia a  detailed proposal on the merger of the investment banking units of both groups.  ―The parties have been in negotiations and seem to have come to more definite  terms on the proposed merger. They are nearing completion of discussions and  aim to submit the details of the merger as early as this month,‖ said a source  familiar with the matter.  The proposed merger is targeted to be finalised by Mar 2012. RHB  Capital is believed to be looking at bringing in an ―outsider‖ who is not  from either entity to lead the investment banking business of the  merged entity. (Financial Daily)

PLUS Bhd, the company taking over Malaysian highway operations of  PLUS  Expressways Bhd, set indicative pricing to sell RM23.4bn of Islamic bonds in  the country's record corporate debt offering. The company, part-owned by  Malaysia's largest pension fund, started inviting bids for RM11.3bn of  syariah-compliant notes with maturities ranging from five to 19 years, and to  yield between 3.8-5.07%, according to a sales note sent to investors yesterday.  PLUS will also privately place some of the bonds, which will have maturities of  20-25 years, it said.(BT)

UDA Holdings Bhd will be reviewing the proposal by Ministry of Finance  (MoF) to divide the former Pudu Jail site, better known as Bukit Bintang City  Centre (BBCC) into three plots, to ensure the value of the land can be  maximised. UDA chairman Datuk Nur Jaz-lan Mohamed said the study is being  conducted by a special committee chaired by a board member before it is  presented to MoF for consideration.  It was reported that the MoF had asked UDA to divide the former Pudu  Jail land into three plots with two being given to Bumiputera companies  and the remainder to a non-Bumi entity. The directive was issued after  the MoF did not consider UDA's proposal to appoint a China  government-linked company, Everbright International Construction  Engineering Corporation, as its joint venture partner for the land. (BT)

Goldis has accepted an offer from Trigoh Sdn Bhd to dispose of its 70% srake  in Macro Kiosk (MKB) for RM15m cash. The proposed disposal will be a  management buyout (MBO) by Goh Chee Ken, Goh Chee Heng and Goh Chee  Seng who are the CEO, COO and head of corporate affairs of MKB respectively.  The 70% stake in MKB was originally acquired for RM105,000 on Feb 1, 2002.  The expected gain on disposal of MKB will be about RM9.5m. (Financial Daily)

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