Monday, July 23, 2012

20120723 1218 Malaysia Corporate Related News.

MMC Corp is believed to have proposed to the government to form a special purpose vehicle (SPV) with Pengurusan Asset Air Berhad (PAAB) to take over the country's water assets. MMC MD Datuk Hasni Harun revealed the proposal to co-own the water assets with PAAB two weeks ago in a presentation to the government with the Finance Ministry, Energy, Green Technology and Water Ministry, and PAAB. "Yes, there was a presentation and they do have such plans, but the proposals have not been thought through yet...there're still a lot of grey areas" a government official said. Some government officials say it would be tricky for MMC to realise the plan. "It is not easy for MMC to venture into the water sector after PAAB was given the mandate to develop and manage the country's water assets. It will be a step backwards..." an official said. Such plan would be contradictory to the initial goal of PAAB ie. water asset nationalisation. (Financial Daily)

The three government-linked funds that were the cornerstone investors in Felda Global Ventures Holdings Bhd (FGV) IPO have been actively trading the stock, which has gained over 17% since listing. Kumpulan Wang Persaraan increased its stake from 5.3% to 6.02% as at July 17. Pilgrimage fund Tabung Haji reduced its shareholdings in FGV to 7.28% from 7.55% as at July 10. The Employee Provident Fund (EPF) ceased to be a substantial shareholder of FGV on July 10, with a balance of 4.94% stake. (Financial Daily)

Sime Darby plans to build palm oil bulking facilities in Liberia or neighbouring areas in the next one or two years. This will be a preparatory move in storing the edible oil before it is exported to markets such as Africa, Europe and the United States. Bulking facilities consist of tank farms used to store processed palm oil such as palm olein or crude palm oil in a regulated environment before they are pumped into vessels and shipped to their export destinations. A source said Sime Darby had tasked Felda-Johore Bulkers with building a tank farm as a preparatory move before it starts harvesting its oil palm plantations in Liberia. Sime Darby also owns a 10% stake in Felda-Johore. (BT)

Malaysia may soon risk losing investments in the palm oil refining industry to neighbouring Indonesia if it does not come up with a policy to create a level playing field. The industry has been suffering since last October because of the duty structure which Indonesia has put in place in August last year to boost downstream activities by lowering export taxes for processed palm oil products. A refiner said the delay in the government's decision to come up with a new policy, had been costly for the past 10 months. It has led to negative refining margins, in sharp contrast to the Indonesian refiners who enjoy a 5%-6% margin. The Palm Oil Refiners Association of Malaysia (Poram) lamented that the broad supply chain in the RM80bn industry will also be affected. (BT)

With additional 5GW of power capacity expected to come onstream by 2020, Malaysia will be the fastest growing power market in Asean and this has caught the eye of international investors. HSBC Southeast Asia’s director of resources and energy group Troy Little said there are many foreign buyers interested in acquiring power assets in Malaysia but there aren’t any willing sellers. Little said foreign investors are eager to add a Malaysian independent power producer to the portfolio because of the lucrative and steady returns as well as the potential upside in the longer run as Malaysia plants up. (Financial Daily)

Proton Holdings Bhd may have to pump in another STG100m (RM491m) in troubled British sportscar maker Group Lotus plc in order to keep it afloat. The money will have to be pumped in by March 2013, said DRB-HICOM Bhd managing director Datuk Seri Mohd Khamil Jamil. Proton has pumped in STG100m into Lotus so far this year after several banks cut their credit lines to the sportscar maker. "Lotus' cash flow is very bad right now. Proton is funding the cash flow but I think there is light at the end of the tunnel," said Mohd Khamil. Mohd Khamil said Lotus was being funded via internally generated funds from Proton and DRB-HICOM. He also confirmed a Business Times report early this week that Proton had submitted a revised plan to the national carmaker's six big lenders. "I have made a personal presentation to the bankers and we are looking to work out a solution where we can draw down the loan. "Between now and December, they (the bankers) will decide," said Mohd Khamil. Lotus has already drawn down more than STG200m before the banks stopped the remaining STG62.5m to be disbursed to Lotus, a move that could push the Hethel, Norfolk-based sportscar maker into technical insolvency. "If Lotus fails, DRB-HICOM will fail. The problem is not here in Hethel. The problem will be in Shah Alam as Proton has given the guarantees (for the loan)," said Mohd Khamil. (BT)

DRB-Hicom aims to see Group Lotus in a healthy financial position in three years. Under the new business model which DRB-Hicom is crafting, Lotus will be in a positive cash-flow not later than 2014. The conglomerate has managed to reduce opex to GBP5m from GBP7m previously. Datuk Seri Mohd Khamil Jamil envisaged that Lotus would need not more than GBP100m in capital by 2013. (Financial Daily)

UMW Toyota Motor Sdn Bhd believes that The Star’s new augmented reality feature, iSnap, will help to bridge the gap between traditional and digital media - and in the process enhance the appeal of the country’s leading English daily. “Traditional medium like the newspapers is moving with time. It is no longer confined to texts and images only. Reading a newspaper can now be very enjoyable with the iSnap function. This innovative tool by The Star bridges the connection between traditional and digital media. “It helps to increase the return on investment of our adverts in terms of expanding the boundaries of what information can be included in a full page ad. It is a revolutionary step by The Star, to evolve its traditional platform to bring life to whatever we intend to communicate in the print ad,” UMW Toyota Motor president Ismet Suki says. (Starbiz)

Berjaya Land Bhd's (BLand) The Great Mall of China (GMOC) is set to outdo others for the bragging rights as the world's largest shopping mall. And BLand has every reason to be confident of GMOC's success, particularly in 'terms of demand for space leasing' as Beijing has high per capital income of US$12,447 (RM39, 200) in 2011. GMOC, the world's biggest integrated mall complex, is estimated to be worth about RM7.5bn on a 32ha site in China's Hebei Province. It is expected to be completed in five years. GMOC has strategically positioned itself in an area where massive integrated public transportation project is due to take place. One notable project is a big subway station, which is expected to be completed in 2018, linking it to neighbouring TongZhou. TongZhou is about 20km away, and the subway will bring its distance to GMOC within 2km, reducing travel time to mere minutes from half an hour now. Beijing's population of over 21 million people, excluding the population of its neighbouring cities such as Tian Jin, Hebei and Yan Jiao, which are also booming due to the country's sound economy, is expected to give rise to the project's popularity. Unlike other shopping malls in Beijing, which are mostly purely shopping driven, GMOC will be the first to break out of the ordinary shopping culture in China by housing three indoor theme parks. GMOC will also impress its patrons with its many world-class amenities, including a multi-purpose convention hall to cater to all forms of business needs. With Phase One due to be completed in October next year boasting of three all-weather and indoor theme parks namely Extreme Park, Family Park and Water Park, GMOC is poised to set the Malaysian flag sailing high globally. (BT)

Demand for CIMB Bank’s newly launched 5-year senior unsecured notes issuance under its US$1bn euro medium term note programme attracted in excess of US$1.2bn with Asian investors accounting for 86% of the allocation with the balance 14% to European accounts. The notes were priced at a spread of 190 bps over the 5-year US Treasury, equivalent to yield of 2.505% pa, with a coupon of 2.375%. (Star Biz)

CIMB: Still keen on QFB licence in Singapore
CIMB Group Singapore is still keen to have a Qualifying Full Bank (QFB) licence in Singapore despite the republic requiring foreign banks with large deposits to incorporate their retail operations locally. Late last month, the Monetary Authority of Singapore (MAS) said foreign banks that fell under the QFB programme must also meet the republic’s stringent capital requirements. Mak Lye Mun, country head of CIMB Group Singapore and CEO of CIMB Bank Singapore, said CIMB was not deterred by the new rules. Instead, he said, CIMB Group Singapore was encouraged by MAS’ recent announcement that it would continue to consider awarding new QFBs to foreign banks operating in Singapore. He noted that such licences were awarded by MAS under the free trade agreement negotiations. (Business Times)

GE Aviation is implementing the world’s first network of Required Navigation Performance Authorisation Required (RNP AR) in Malaysia with AirAsia. GE’s unit would design, deploy, validate and maintain a network of precise RNP procedures to utilise the performance characteristics of AirAsia’s A320 fleet. GE said the highly-precise paths would improve operating efficiencies for AirAsia by reducing track miles and fuel burn while also providing aircraft with precise lateral and vertical arrival and missed approach guidance. (Bernama)

Tune Talk is eyeing one million active users by year-end, from the current 700,000, driven by its partnership to be the official Asian telecommunication partner of English football club, the Queens Park Rangers. Tune Talk subscribers can look forward to exclusive QPR contents, such as match highlights and player updates. They would also be entitled for discounts on merchandise as well as football-related packages such as tickets to matches, flights and accommodation. (Bernama)

MK Land says there will always be a demand for affordable houses and will continue to build them even during an economic downturn. Chairman Tan Sri Mustapha Kamal Abu Bakar said the company has a 2,800 ha. landbank on which 114,000 houses can be built and will focus on Selangor, Perak and Kedah. MK Land has completed 44,479 houses valued at RM5.6bn, including some 30,000 affordable units. It will build 2,300 houses valued at RM500m in the next two years. (Bernama)

Guan Chong Bhd shareholders have approved the company’s plan for a secondary listing in Singapore at an EGM. Guan Chong said the greenlight concluded all the necessary approvals needed from the relevant stakeholders in both Malaysia and Singapore. “This paves the way for the group to continue to the next agenda on its Singapore listing timeline, the launching of its initial public offering (IPO) prospectus,” it said. Managing director and CEO Brandon Tay said the details on the launch of the IPO prospectus were now being finalised. “We will make the necessary announcement at the appropriate time,” he said. (Starbiz)

Alliance Financial Group: Not primed for M&As
Alliance Financial Group (AFG) is not being primed for any near-term mergers and acquisitions (M&A), said Alliance Bank group CEO Sng Seow Wah. He downplayed talk of consolidation for the country’s second-smallest bank by market capitalisation. When asked if the bank’s loan-to-deposit ratio of 76% as at end-March gave it comfortable headroom to digest an acquisition, he replied that the buffer is to protect the group’s stakeholders and not for building a warchest for M&A activity. Chairman Datuk Oh Chong Peng also said AFG was not privy to the negotiations between Singapore’s DBS Bank Ltd and Temasek Holdings. (StarBiz)

Perwaja Holdings: On track to get large iron ore mine
Perwaja Holdings is on track to get a giant share in one of the largest iron ore mines in the country, fending other local steel players eyeing the mine, located in resource-rich Terengganu. State government officials say they are still evaluating the iron ore mining concession in Bukit Besi but are committed to giving Perwaja a large tract, as they had agreed to last year. An official says the plan to allow the mining of iron ore on a concession basis is very much intact.  However, he said the feasibility study is taking longer than expected because it is quite thorough. (The Edge Weekly)

Southern Steel: To build flat-steel plant
Tan Sri Quek Leng Chan’s Southern Steel has joined the ranks of those seeking to build flatsteel plants in the country, an area that has been largely controlled by Tan Sri William Cheng’s Lion Group. Executives close to Southern Steel say the company obtained the approval of the Malaysian Industrial Development Authority about six months ago to set up a flat-steel plant on the premises of its long-steel plant in Prai, Penang. (The Edge Weekly)

Catcha Media: Plans to list iCar Asia Ltd
Catcha Media is planning to list iCar Asia Ltd on the Australian Stock Exchange. iCar is a special purpose vehicle held by Catcha Group Pte Ltd, Catcha Media’s major shareholder. Catcha Media has proposed to inject various assets into iCar Asia, which will operate as a regional online advertising service provider and car magazine publisher. Post-listing, the group will have a 40.04% stake in iCar Asia. The listing will allow Catcha Media to raise funds as working capital for iCar Asia so that it can accelerate expansion and strengthen its market position in the Asean region. (The Edge Weekly)

Banking: Mobile banking services coming up      
Malaysian Electronic Clearing Corp Sdn Bhd (MyClear), a wholly-owned subsidiary of Bank Negara, has teamed up with 3 banks and is working with another three this year to offer mobile banking services. The 3 banks that it has tied up with to offer mobile banking service, scheduled for the fourth quarter, are Maybank, CIMB Bank and Public Bank. It, however, did not disclose the names of the other 3 banks. MD Mohd Suhail Amar Suresh said it was currently piloting the mobile banking services with the first three banks in collaboration with three telecommunication companies, namely Maxis, Celcom and DiGi. As a facilitator of mobile banking, MyClear via its mobile infrastructure MyMobile system, allows banks to connect to all participants (telcos and banks) without having to link up with individual parties. Mohd Suhail said MyClear was projecting about 590,000 transactions this year through its MyMobile services. (StarBiz)

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