Wednesday, April 4, 2012

20120404 1028 Malaysia Corporate Related News.

Used car sales have fallen as much as 40% for the first two months of the year, partially due to the new tight lending rules and sluggish consumer sentiment. The Federation of Motor and Credit Companies Association of Malaysia (FMCCAM) said on average its members saw a 20% drop in sales for used car ownership. "The tighter lending conditions as well as the economic uncertainty in Europe have led to the drop in sales volume in January and February this year," FMCCAM president Datuk Tony Khor said. Used car sales in the country, Khor said, is expected to hit about 600,000 this year, with an average of 150,000 units per quarter. (BT)

MAS: Scraps regional premium airline plan
Malaysia Airlines (MAS) has dropped plans to set up a regional premium airline. The airline's short haul business will instead remain as a division in the full service carriers' operations. MAS short haul COO and Firefly CEO Ignatius Ong said the objectives and goals of the short haul business remains, but it won't be its own airline. He declines to elaborate further on the matter. However, media reports indicated that the plan was abandoned due to strong resistance from the airline’s staff union.  (Business Times, Financial Daily)

Malaysia Resources Corporation: Open to selling EDL
Malaysian Resources Corporation (MRCB) is open to option for its Eastern Dispersal Link (EDL) in Johor Baru, including the sale of the highway. MRCB said the government could also consider charging a levy on foreign-registered vehicles going into Singapore using the highway. Originally, all vehicles, except motorcycles, using the Causeway were to pay toll on the EDL. The ED leads to the Customs, Immigration and Quarantine (CIQ) Complex and onwards to the Causeway that connects Johor Baru to Singapore. (Financial Daily)

Maxis: Unveils integrated solution for retail SMEs
Maxis had launched Built for SME-Retail, the first all-in-one integrated solution in Malaysia for retail small-and-medium enterprises (SMEs). The package comprises Biz Fibre with CCTV, Software-as-a-Service on Maxis Cloud and Maxis Business Community Call. Maxis joint COO Mark Dioguardi said the package offers SMEs a communications solution that is reliable, competitively priced and simple to set up, which will ultimately help to manage their costs and resources more effectively, increase productivity and grow  their business more efficiently. Senior vice president and head of enterprise business services, Fitri Abdullah, said Maxis is serious in their first step in digitising SMEs. He said the system will provide SMEs with business solutions where owners can monitor their accounts, stocks, sales and inventory via Maxis Cloud in real time. He added that owners can monitor all on-going activity at their premises using various handheld platforms while being away. He also said that through Maxis Business Community Call, employees and business-owners can interact with each other for free, either from a mobile to a mobile or from mobile to a fixed line, or vice versa. (Bernama)

Proton: DRB-Hicom conducts due diligence on Lotus
DRB-Hicom has hired two top-notch forensic teams to conduct a due diligence on Lotus Group International Ltd. Lotus, the British sportscar maker owned by Proton, has been a major strain to the national carmaker’s cashflow over the years. According to Business Times, separate teams from Ernst & Young (EY) and a unit from the influential Rothschild Group have been given the mandate to evaluate Lotus and its management team. It is understood that the forensic teams, which has been stationed at the Lotus’s Norwich office since late last month, will take at least 6 weeks to complete their tasks. (Business Times)

DRB-HICOM said it is always reviewing its investments in companies it has stakes in and may consider any proposal if it is in the company’s best interest. It told Bursa Malaysia this in response to a news report stating that it may be selling its stakes in Uni.Asia Life Assurance and Uni.Asia General Insurance. (BT)

Felda Global Ventures: Jun listing is on track
Felda Global Ventures Holdings has reiterated that it is on track for a listing on the Main Market of Bursa Malaysia by Jun. The listing exercise will be preceded by a windfall to reward Felda's first-generation 112,635 settlers, who first toiled the land in 1956. Felda Global president and CEO Datuk Sabri Ahmad said the windfall, which will be announced by Prime Minister Datuk Seri Najib Razak, will come from Felda's own coffers and not from the government. He said the windfall is to reward the very first-generation settlers who have been working hard for the past 40 years with no open roads, no schools and no electricity. (Business Times)

Felda Global Venture Holdings (FGVH) is keen to explore opportunities in Myanmar to develop plantations and related downstream business. FGVH president Datuk Sabri Ahmad said Felda's efforts in Myanmar could include providing technical training and planting assistance. He added that Felda had plans to expand its oil palm land bank as the potential for expansion domestically is limited. On its downstream business, Felda’s products have been actively sold in the country since late last year, with cooking oil constituting the bulk of sales. Felda is also looking at the potential for logistics and port management in Myanmar. (StarBiz)

Felda guarantees a total of 112,635 settlers will get a windfall following the listing of Felda Global Venture Holdings (FGVH) in June. Its deputy general manager (community development) Faizoull Ahmad said Felda was fair to all settlers although some rejected the listing of FGVH on Bursa Malaysia. He said Felda was aware some settlers rejected the listing because they were obsessed with the instigation of the opposition which wanted to foil the effort of the government for the future of the target group. "We will still distribute the reward, which is regarded as the biggest windfall in the history of Felda, fairly to all in two phases in May and July. (The Sun Daily)

MISC: MARC revises MISC Islamic debt programme outlook to negative
Malaysian Rating Corp (MARC) has affirmed its ratings on  MISC Bhd’s  RM2.5bn Islamic medium term notes (IMTN) and RM1bn Murabahah commercial papers/medium term notes (MCP/MTN) programmes at AAAID and MARC-1ID/AAAID respectively and revised the outlook to negative from stable. The rating action affects RM2.25bn of outstanding notes under the rated programmes. The outlook revision follows the company’s recent release of its unaudited results for the last  9 months of 2011, which indicated earnings pressure, declining interest coverage, increased debt leverage and persistent negative free cash flow. (StarBiz)

Sime Darby: Unit sued again by EMAS
Emirates International Energy Services (EMAS) has filed another suit against  Sime Darby Engineering Sdn Bhd (SDE) at the Judicial Department of Abu Dhabi similar to the amount in the first suit totalling US$178.2m (RM543.51m).  Sime Darby said the claim by EMAS was based on the same facts and grounds as the first suit which was filed in Jan last year and was dismissed by the court. The amount of US$178.2m comprised of a payment of US$128.2m and US$50m for commissions and moral compensation respectively. The court had fixed Apr 9 for case management. (StarBiz)

Sime Darby Bhd has completed the disposal of its fabrication yards in Teluk Ramunia and Pasir Gudang. In a filing to Bursa Malaysia yesterday, it disclosed that the disposal considerations for the assets were RM296m and RM393.4m respectively. (Bursa Malaysia)

SEGi: Navis has not decided on buying out SEGi
Navis Capital Partners, which has already announced its acquisition of a 28% stake in  SEG International Bhd (SEGi), has yet to decide if it will buy out the rest of the shares in the company. Nicholas Bloy, the managing partner of Navis Asia VI Management Company Ltd said said Navis liked the education sector, especially in emerging markets, because of the growth potential and the sticky customer profile. The Navis investment comes from the Navis Asia Fund VI, a US$1.2bn fund that had closed its fund raising in Sept 2010. (StarBiz)

Petra Energy: Inks MoU with Baker Hughes
Petra Energy has into a Memorandum of Understanding (MoU) with Baker Hughes (M) Sdn Bhd (BHM) to undertake oil and gas projects in Malaysia. Petra Energy said the company and Baker Hughes would co-operate to provide capability development services including deploying their respective expertise and knowledge for oil and gas projects for operators in Malaysia within the duration of the MoU. Arising from the provision of the aforesaid cooperation, if and when a contract or contracts are secured, BHM shall assume one or more roles to be mutually agreed by the parties under a formal and final contract. The MoU shall remain in effect for one year from the date of MoU. (Financial Daily)

MKH: Unit gets contract worth total RM675m over 5 years
A wholly-owned unit of MKH has been awarded a turnkey construction contract (TCC) worth a total of RM675m over five years by Puncak Alam Resources (PAR) to build residential and commercial properties in Kuala Selangor. The company said on Tuesday that its unit Pelangi Seri Alam Development Sdn Bhd (formerly known as Fresh Partners Malaysia Sdn Bhd) had been awarded the TCC for the project on the land measuring about 550 acres in the Jeram and Ijok in the district of Kuala Selangor. The company said the contract value for the Project was approximately RM135m per year over 5 years, and that PAR would award the turnkey construction packages to Pelangi Seri Alam progressively based on the development phases. (Financial Daily)

DKSH Holdings (M) had inked an agreement with Indonesian-based company Kion Care (M) to sell and distribute the latter’s products in Malaysia. According to a statement, DKSH will support Kino Care’s brands of Eskulin, B&B Kids and Master Kids with the former’s sales, logistics and distribution services from Apr 2012. “We are proud that Kino Care has appointed DKSH as their exclusive market expansion services provider in Malaysia. In addition, this partnership will further strengthen DKSH’s leadership position in the personal care market,” said DKSH ED of business unit for consumer goods Lian Teng Hai. (Starbiz)

Sarawak Oil Palms: Diversifies into shipping
Sarawak Oil Palms (SOPB) is diversifying into the shipping business following a JV agreement with Shin Yang Shipping Corp. SOPB said the collaboration will allow the firm to participate in the edible oil shipment business, and at the same time, offer logistics support to the plantation entity. SOPB and Shin Yang have set up a JV firm where both firms will hold 45% and 55% respectively. Both firms have common shareholders, hence, the collaboration is a related-party transaction. (Financial Daily)

Ekuinas aims to be the biggest player with more acquisitions
Ekuiti Nasional (Ekuinas) plans to create one of Malaysia's largest education entities and is now eyeing a third education group just after completing its acquisition of a 90% stake in Cosmopoint SB for RM246m. Among the education groups that Ekuinas is eyeing are Masterskill Education Group (MEGB) and HELP International Corp. MEGB has some 11k students as of 2011 while HELP has 13k students. If Ekuinas were to acquire either one of these education groups, its student enrolment would increase to almost 30k from about 20k currently, making it the biggest listed education player. (StarBiz)

Greenyield: In JV with Kelantan government
Tigantara Plantations Sdn Bhd (TPSB), a wholly-owned subsidiary of Greenyield has signed a JV agreement with the Kelantan government. The company said the agreement is to set out the terms, conditions and provisions related to the right to use over the 400ha within Relai Permanent Forest Reserves in Gua Musang, Kelantan for 50 years. It said TPSB will pay a RM300,000 deposit or RM2,000 per hectare, whichever is higher and a premium payment of RM3,000 per hectare to the Kelantan government upon the release of the timber residues. (Financial Daily)

Xian Leng: MD resigns over accounting issue
The MD of Xian Leng Holdings, Ng Huan Tong resigned Tuesday amid accounting irregularities in the group’s books that could reach up to RM90.7m. He has also resigned from the company’s remuneration committee and as chairman of the employee share option scheme (Esos). Replacing him in both positions is Kuan Kai Seng, a 38-year old chartered accountant. According to an observer, the group’s board of directors has been trying to oust Ng as the MD since the accounting issue was discovered, but failed due to his majority ownership of Xian Leng. (Financial Daily)

Property: Transactions up 14.3% to 430,403 last year
Property market activities registered the highest increase in 5 years, recording a 14.3% increase in transactions to 430,403 and a 28.3% rise in value to RM137.8bn last year. Deputy Finance Minister 1 Datuk Donald Lim Siang Chai said the residential sub-sector spearheaded the overall property market, controlling 62.7% of total transactions and 44.9% of value. According to him, almost 50,000 units were launched in the market, of which 22,000 units were sold recording sales at 46.3%. Affordable housing costing below RM250,000 recorded the highest demand for properties making up 45% of new launches. In the commercial subsector, national occupancy rate for purpose-built office was more than 80% while take-up space remained positive at 250,000 sq metres. Overall, Lim said property prices were stable with increasing trend recorded in certain locations. The national house price index rose 6.6% to 156.9 points in the fourth quarter (Q4) of 2011. (Financial Daily)

Property: Government moves to avoid bubble
Malaysia is taking strict measures to avoid a US-style subprime mortgage lending crisis, after reporting an average 6.6% jump in home prices in 4Q 2011, an official says. Deputy Finance Minister Datuk Donald Lim said the government is worried about property prices causing a bubble, and we don't want banks to over-lend to the property sector. He said there are a lot of foreigners from Middle East and China keen to buy properties in Malaysia. According to data on Bank Negara Malaysia (BNM)'s website, housing loan applications jumped 46% in February from a  year earlier to RM14.96bn. BNM last tightened mortgage lending rules in Nov, limiting the loan-to-value ratio for people taking third mortgages to buy homes.(Business Times)

Timber: Sabah plantation timber production hits 1m cubic metre mark
Sabah Forestry director Datuk Sam Mannan said Tuesday that production of plantation timber in Sabah hit the 1m cubic metre mark last year with a total production of 1.2m cubic metres. He said total production from plantation timber had increased by 141% since 2001 with Acacia mangium showing the most significant increase at 231%, making it the major plantation species produced over the last 10 years. He also said that utilisation of rubber wood however remains small despite the extensive land clearing of old rubber plantations for replanting of new rubber trees. Meanwhile, log production from natural forests was approximately 2.6m cubic metres, higher than plantation timber, he said, adding the state's goal of making plantation timber the major source of raw materials for the timber industry can be achieved if the current trend continues. (Bernama)

Economy: RON97 is now RM2.90 a litre
The price of premium petrol RON97 has gone up by 10 sen. It’s now RM2.90 per litre. Petrol Dealers Association of Malaysia (PDAM) deputy president Datuk Zulkifli Abdul Mokti said the increase was due to soaring global fuel price that had hit US$120 per barrel (RM366). He added that the prices of RON95 and diesel would remain the same. (The Star)

Economy: Petronas to cut dividend to government
Petronas Malaysia’s state oil company, plans to lower its annual dividend paid to the government to RM28bn (US$9.2bn) this year as it holds onto cash to help reverse a production slump. Petronas which manages the nation’s energy reserves, is the biggest single contributor to government revenue, having paid RM30bn in dividends for each of the past three financial years. Shamsul, who took over as CEO in 2010, wants to retain more of the company’s profits to invest in exploration after seeing Malaysia’s oil and gas production fall for 3 straight years. Petronas plans to spend a record RM300bn over 5 years to replenish the country’s maturing reserves and counter mounting exploration costs. It has stepped up offshore drilling with local and overseas partners, including Petrofac Ltd, to boost the nation’s underground holdings of oil and gas. (Business Times)

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