Monday, October 8, 2012

20121008 1048 Malaysia Corporate Related News.

Oversea-Chinese Banking Corp and  CIMB Group Holdings Bhd are considering bidding for General Electric Co’s US$1.6bn stake in Thailand’s Bank of Ayudhya Pcl, said three people with knowledge of the matter.  The two lenders have signed non-disclosure agreements that allow them to examine in closer detail the accounts of the Bangkok-based bank, the people said, asking not to be identified as the process is private. GE’s finance unit owns 25% of Thailand’s fifth-largest lender. Malayan Banking Bhd, Malaysia’s biggest lender, would be interested in one-on-one discussions with GE about its Bank of Ayudhya stake, though doesn’t want to compete with other bidders, one person familiar with the matter said. Maybank hasn’t signed a non-disclosure agreement, this person said. (BT)

Maybank proposed to place out 300m new shares, representing 3.68% of its enlarged share capital as at 30 Sep 12, with a possible upsize, depending on investor demand. At this juncture, the identity of the placees of the shares is unknown. The proposed private placement will not be implemented in tranches. The issue price has also not been determined yet. (BMSB)

WCT proposed an internal restructuring exercise involving the creation of WCT Holdings (WCTH), which will assume the listing status of  WCT Berhad (WCTB). The group's existing key business segments, i.e. construction, property development, property investment and concessions, will remain under WCTB and WCT Land. The shareholding structure post restructuring will be unchanged. All ownership of shares and warrants will be exchanged between WCTB and WCTH on a 1-for-1 basis. WCTB's ESOS will be terminated accordingly. The consent of all lenders/bond holders of WCTB may be required as the exercise may involve novating WCTB's borrowings to WCTH, where ever applicable. The internal reorganisation is targeted to be completed in 2Q13. (BMSB)

LTE will give DiGi leverage to seriously pursue the large screen (notebook, PC) market, said DiGi's CEO Henrik Clausen. "...with the launch of LTE, we will be more aggressive in large screens because we will have a more effective technology to provide services to the market on top of a more effective network." "We are waiting anxiously for the spectrum allocation because we are ready to launch LTE services," says Clausen. (The Edge Weekly)

The Malaysian government has deferred a decision on a proposal to cut the export tax on  crude palm oil to 8%-10% from 23% because it needs more time to study the issue, an aide to Commodities Minister Bernard Dompok said last Friday. The Malaysian government will make a decision soon, the official, who declined to be named, said in a text message.  Malaysian palm oil refiners have been seeking a lower export tax for nearly a year, since the Indonesian government cut its export tax, boosting Indonesian refiners’ margins and enabling them to capture market share from their Malaysian competitors. (Dow Jones)

Indonesia, will maintain its current palm oil  export tax  despite a potential export tax cut by its top competitor, Malaysia. Deputy Trade Minister Bayu Krisnamurthi said the current 10% export tax could further boost the development of the local downstream industries. He said the government needs to monitor a three-year average prices before changing its export tax policy instead of reacting to a single price drop. "Business players expect a consistent (government's) policy. We must anticipate the market, but at the same time, must remain consistent," Bayu was quoted. (Bernama)

Felda Global Ventures Holdings (FGV) plans to develop a complete supply chain of its three core businesses  - palm oil, sugar cane and rubber  - in Myanmar. To realise the goal, the group has signed a memorandum of understanding (MoU) with local partner, Pho La Min Trading Ltd (PLM), to explore rubber plantations and rubber processing in the country. President and Chief Executive Officer Sabri Ahmad said under the deal, a joint-venture company will be set up to develop rubber business in three phases, starting with the establishment of a processing plant. "We hope to conclude this in December or early next year and then we will plan to grow rubber trees on 30,000 hectares in Myeik. "As for the third phase, we are looking at downstream opportunities such as tyre manufacturing and rubber glove," he added after the MoU signing. (Starbiz)

Alliance Financial Group (AFG) has quashed market rumours that it plans to sell its investment banking operations. "The investment bank is still an important part of our franchise. It's not for sale," group CEO Sng Seow Wah said. (BT)

The construction sector will remain the darling of the Malaysian economy for the next couple of years if its performance in 1H12 is a measure.  CIDB CEO Datuk Seri Dr Judin Abdul Karim is confident that the momentum can be maintained through 2016. "For the next few years, the projects would have already started, and they are adequately large to pull us through by which time the world economy would have picked up its reins," he said. Thanks to robust activity in the civil engineering and residential sub-sectors, the construction sector expanded by 18.9% in 1H12, the fastest pace enjoyed since 1995. The construction sector grew by 22% Apr-Jun 2012  and he does not see any reason why 3Q12  would not be as good if not better. "The MRT and oil and gas projects will change the face of the industry as they are international and offer our contractors to move up the value chain and become competitive." he said. (BT)

The US$1.5bn initial public offering (IPO) from broadcast TV operator, Astro Malaysia Holdings, became Malaysia's third multi-billion dollar listing this year and pushed the volume of IPOs from Malaysian companies to US$7.3bn for year-to-date 2012, already beating the all-time annual record set in 2010 (US$6.9 bn). According to Thomas Reuters Investment Banking Scorecard, bolstered by a flurry of offerings, Kuala Lumpur listings now rank fourth globally behind Nasdaq, the New York Stock Exchange and Tokyo First Section, by proceeds raised. It said CIMB Group leads the ranking for Malaysia IPO underwriting this year with proceeds of US$1.4bn for 20.1% market share, followed by Deutsche Bank and Maybank, each with 12.2% market share this year. JP Morgan and Morgan Stanley round out the top five. (StarBiz, Bernama)

Axiata Group is vying for a piece of Myanmar's market. Axiata has said it hopes to play a major role in the Myanmar telecoms market and has no qualms about partnering a Burmese party for that purpose. Global players like Norwegian firm Telenor (parent of DiGi.Com Bhd), Digicel, the largest mobile operator in the Caribbean, Vietnam's VNPT-Fujitsu, Russian heavyweight VimpelCom and Sweden's TeliaSonera AB, are all jockeying for a chance for the four telecom licences that will be dished out, according to reports. Telecoms suppliers like China's Huawei are fast positioning themselves as network suppliers and consultants. The Myanmar government is in the midst of selecting a consultant that will oversee an upcoming tender for the telecom licences. It is yet unclear when the tenders will be out. (StarBiz)

SapuraKencana Petroleum has acquired 38%  in derrick lay barge, Quippo Prakash from Indian company, Quippo Oil and Gas Infrastructure Ltd (QOGIL) for US$122m (RM373m). Outfitted in Singapore and commissioned in 2010, the state-of-art offshore construction support barge, upon delivery was placed on term charter with a major offshore contractor in South East Asia, generating positive returns and cashflows immediately. Equipped with a 2000MT crane, the barge was designed to provide offshore construction support and underwater pipe-lay capability. (BT)

Perisai Petroluem is poised to move one notch up the ladder in the supply chain of the industry by going into the lucrative floating, production, storage and offloading (FPSO) market. Sources said that Perisai is looking at acquiring a stake in an FPSO vessel from its shareholder  Ezra Holdings Ltd and the vessel is to be used for providing services to an offshore O&G field in Malaysia. Sources said a consortium led by Ezra has put in a bid to supply the FPSO vessel to cater to the North Malay Basin field located off the coast of Terengganu and Kelantan. (Financal Daily)

Gadang Holdings has accepted an LOA from  Petronas to conduct site preparation works for Phase 1 of Petronas' proposed  Refinery and Petrochemical Integrated Development (RAPID) project in Pengerang, Johor. Sources said the contract is valued at some RM330m. MD/CEO Tan Sri Kok Onn said the group was looking towards “better performances” in the coming quarters, as a result of the inflow of jobs. Currently Gadang's profits come mostly from its engineering and construction unit. It does have other business segments such as plantation, property development and utilities. Outstanding order book stood at about RM1.7bn  which will last for another two to three years. “And we are actively participating in tenders of more than RM5bn,” he said. As for its property division, ongoing GDV stood at RM894m. Gadang is also actively involved in the Indonesian water supply sector. Over the years, Gadang's wholly owned Asian Utilities Pte Ltd has acquired controlling stakes in five Indonesian water supply companies. It's water  supply division contributed about 13% to group pre-tax profit in the last fiscal year. Gadang is actively exploring investment opportunities in other utility segments and could partner with parties to work on projects to build and manage mini-hydro power plants in Indonesia, he said. Gadang made inroads into the plantation sector about three years ago after joining forces with landowners to develop two parcels of land, measuring 5.2k acres in Ranau, Sabah. Planting for the entire land is scheduled to be completed by the end-12. (StarBiz)

Sunway's property development division is on track to achieve its targeted sales of RM1.3bn in 2012. YTD sales is RM1bn, MD of property division (M'sia) Ho Hon Sang said. The major drivers of property sales this year include new phases at Sunway South Quay,  and Sunway Velocity in KL. New developments such as Sunway Geo @ Sunway South Quay, Sunway Velocity's Phase 3C1 and Sunway Wellesley Phase 1 in Penang had recorded take-up rates of more than 80% during previews. GDV of these projects is RM700m. He said the recent preview of Sunway Geo's 31 units of retail shops and 220 units of flexi suites, priced at RM7m and RM400k onwards per unit, has received overwhelming response. “The shops recorded take-ups of more than 80%.” he said. Sunway has undeveloped land bank of 2.8k acres, with a possible GDV of RM32bn. About 93% of the group's undeveloped land bank is in Malaysia with a GDV of RM24.5bn. The balance is in Singapore. The group's launch plans in the Klang Valley in 4Q12 include townhouses in Sunway Montana (phase two) at Desa Melawati, cluster homes in Sunway Alam Suria (phase 2C1) in Shah Alam and three-storey park residences in Sunway Eastwood (phase two) in Puchong. (StarBiz)

DiGi believes it is only a matter of time before it closes the gap with its rivals. The company is currently in the midst of a three-year transformation agenda, which ultimately allows it to compete better against rivals in terms of quality of services as well as prices. "There are two things you need to make sure in order to make data profitable  - first is to ensure that you can provide the capacity and coverage at the right cost and therefore the right price, and that's why we are currently in a transformation agenda. All that is to drive down our unit cost. By driving down unit cost, we will be able to support the demand of our customers in a profitable way," CEO Henrik Clausen said. DiGi is embarking on a network-swapping exercise - swapping the older equipment with newer ones that could handle  all 2G, 3G and the Long-Term Evolution (LTE) technologies under one platform. Besides the swapping of its network, the company is also teaming up with Celcom Axiata to share base station sites and to build fibres. By the end of this year, the partnership  is expected to have built about 1,000km of fibres. Clausen added that with the LTE technology and fibre in place, it will allow DiGi to re-enter the big screen mobile broadband market more effectively. DiGi has committed a capital expenditure of RM700m to RM750m in 2012, plans to boost its 3G coverage from about 50% currently to 70% in the first half of next year. It is also keeping its fingers crossed on the reallocation of the 900Mhz spectrum. DiGi currently has only 4 MHz of the 900MHz spectrum band,  comprising 2 MHz it owns and 2 MHz it is leasing from. In contrast, its rivals Celcom and Maxis have more than 30MHz. (BT)

Lion Forest Industries Bhd's wholly owned subsidiary, LFIB Plantations Sdn Bhd, has entered into an agreement with PT Karya Tekhnik  Utama and Kyosen Transport Pte Ltd to acquire the entire stake in Indonesia based PT Varita Majutama for RM197.63m. PT Varita has a total landbank of 52,641ha in Papua Barat, Indonesia. (Malaysian Reserve, Bursa Malaysia)

The softened global hard-disk drive (HDD) market is driving two local HDD component manufacturers to pursue different business directions.  Eng Teknologi Holdings will produce components such as actuators and baseplates for the new 5mm-thick HDD used in ultrabooks and hybrid drives starting early next year. Meanwhile, Dufu Technology Corp will work towards reducing the contribution of its HDD component business to about 60% in 2013 from 70% presently. Eng Teknologi CEO Datuk Y.K. Teh said that the multimedia storage sector, servers, hybrid drives and ultrabooks would continue to drive the demand for HDD for at least another 5 to 10 years. “Due to competition from tablets, the growth may not be double-digit percentage but will be single digit. A key area of growth is the hybrid drive segment, which uses both solid state drives and thinner HDD to enable quicker access to data,” he said. Dufu CEO P.Y. Yong said the group expected global demand to remain flat for the next two years due to the growing popularity of tablets using solid state drives. Yong said the group would ramp-up production of medical, sensor and control devices to reduce the contribution of HDD components to its revenue in 2013. “We are returning to the black this year, thanks to these new products and a weakened ringgit, which boosted margins. (StarBiz)

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