20100405 1141 Malaysia Corporate News.

Hong Leong Bank received confirmation from EON Capital to table the offer for consideration and approval by EON Capital’s shareholders and submit applications to the Minister of Finance and other relevant regulatory authority for approval of the offer. In addition, EON Capital had also requested Hong Leong Bank to consider, in addition to the proposed all-cash settlement, an option for settlement of the offer price which includes some element of equity in Hong Leong Bank. (BMSB)

According to sources, EPU's toll rate restructuring plan would involve a more structured/long term solution which will be based on the current method of compensation ie. cash and longer concession periods. The government is in discussion with toll operators whether they prefer the current arrangement or compensation via off-setting the taxes they pay, where the government effectively pays off the toll operators by forgoing future tax income. However, since every concessionaire is different, it may be may prove to be difficult to come up with a blanket solution. The toll restructuring plan was originally due to be revealed in Jul-09. (Edge Weekly)

The government is prepared to restructure the salary and allowance of some 1,880 Pos Malaysia staff so that they are on par with their counterparts in the civil service. Information Communication and Culture Minister Datuk Seri Dr Rais Yatim said the salary and allowance received by clerks and postmen were below the poverty level. The details of the proposal would be announced shortly. The government would also announce a new postage stamp tariff which had not been reviewed since 1992. (Bernama)

The government, facing its most serious budgetary crisis in decades, is leaning towards allowing gaming tycoon Vincent Tan to revive a potentially lucrative gaming concession. Government sources and financial executives close to the businessman said Prime Minister Najib Razak's administration has agreed in principle to allow Tan, who controls the Berjaya Group, to proceed with the concession, which permits nationwide 'off site' sports betting, according to a Straits Times report. But the government could face a potential backlash from the predominantly Muslim population, they added. "The economic rationale for allowing this is very compelling, but the PM has to weigh the political fallout because the opposition will have a field day," said a government official close to the situation. (SST)

French firms have stepped up restrictions on the use of palm oil, decrying it for being linked to deforestation in Asia. While the move may boost demand for local oils, some have warned it could raise new food and land problems.

• The debate about palm oil's impact on the environment has intensified after green groups published reports last month blaming the way key producers were sourcing their oil by destroying rainforests and threatening endangered species. 
• In France, it was amplified by a television broadcast that condemned food makers' use of cheap palm oil to cut costs and referring to health concern that its high level of saturated fat could raise cholesterol and heart diseases.
• 'By removing palm oil from our products in favour of rapeseed oil, we act in a responsible way both in terms of environment and public health,' Findus, France's largest frozen food maker, said. Using the same arguments, retailer Casino said last week that more than 200 food products would be guaranteed to be palm oil-free by the end of the year and another 370 would follow. Palm oil would be replaced by rapeseed or sunflower oil. The policy would also apply to company labels in Casino's other retail divisions, which include Leader Price and Monoprix. (SBT)

Billions of ringgit are wasted along the whole palm oil value chain every year and oil palm planters say closer ties with the government can prevent such losses. "So far, reports have been focusing on labour shortage. It is not just that one issue. It is more of inefficiencies along the whole value chain," said Layar Positif MD Charles Chow, an oil palm smallholder in Sandakan, Sabah. He urged the Malaysian Palm Oil Board (MPOB), the Immigration Department and the finance and human resources ministries to be more engaging with smallholders. (BT)

The future of oil palm plantings lies in Sarawak as Malaysia's agriculture land is limited. Last year, the state overtook Johor to be the second biggest oil palm state in the country after Sabah. In view of this, it is important for the Malaysian Palm Oil Board (MPOB) to be more forthcoming in communicating facts and figures of peatland oil palm planting to all stakeholders, say industry players. Sarawak Oil Palm Plantation Owners Association (Soppoa) for one agrees with the problem of labour shortage. "The future growth of the oil palm industry is in Sarawak's fertile agriculture land," said Soppoa secretary Phillip Ho. "But now we have a big problem of uncollected fresh fruit bunches rotting in the fields due to labour shortage," he added. (BT)

Tenaga Nasional (TNB) will not get additional profits should the government decide to allow it to raise the electricity tariff to compensate for increase in fuel prices, its CEO Datuk Seri Che Khalib Mohamad said. "When fuel prices increase, we have to pass (the extra cost) to consumers or else, we cannot sustain," he said. (Malaysian Reserve)

Regional distribution, marketing and business process centres from Singapore's services centre could soon move or expand into Iskandar Malaysia, says the chief executive of Johor's economic zone development agency.

• With the escalating cost of doing business and the shortage of land and space in Singapore, Iskandar Malaysia is positioned as the best alternative for relocation or business expansion,' said Ismail Ibrahim, who officially took the helm at Iskandar Regional Development Authority (IRDA) last November. 
• Last year, 38 Singapore companies invested a total of RM921m in Iskandar Malaysia. This brings total manufacturing investments from Singapore's private sector since its 2006 launch to RM2.68bn. There are some 323 Singapore companies operating within the zone.
• Raffles Education recently announced that it will open a campus there, while Parkway Holdings is looking to set up a hospital and Health Management International already has a hospital in operation. (SBT)

Indian telcos will wade into this week’s 3G spectrum auctions with aggressive bids starting at over US$1bn squaring off against each other to win crucial airwaves that are finally up for grabs after a delay of three years. The government has set mock auctions on Monday and Tuesday and the actual bids on April 9. “Of the six companies that have pitched for a pan-India 3G spectrum, Vodafone, Airtel, Idea and Aircel are facing a serious 2G spectrum crunch,” said Com First India director Mahesh Uppal, a telecom consultant. “For these companies, 3G spectrum is critical and they cannot afford to let go airwaves. The bids would be very aggressive and it is unlikely that companies would bid less than US$1bn dollars, given that the base price is US$780m, said Mr Uppal, a former member of telecom regulator Trai. 3G services were due for launch in 2007, but have repeatedly been deferred amid troubles over freeing up airwaves and setting bid prices. (Economic Times of India)

Maxis has announced its sponsorship of Formula One team Lotus Racing. “Maxis is pleased to broaden its sports involvement through the sponsorship of Lotus Racing in Formula One. This is the pride of the nation and, as the leading and most innovative Malaysian telco, which is also globally respected, we wanted to be a part of this wonderful Malaysia moment,” CEO Sandip Das said. (StarBiz)

U Mobile is not discounting the possibility of going public. "We will disclose the plan when it is appropriate. We are not in the position to comment at this point in time as we are still waiting for our new shareholder to discuss (the subject) further," a company spokesperson said. (Financial Daily)

Multi-Purpose Holdings is keen to increase its stake further in U Mobile from the current 7% but only if it gets to buy the shares at the right price, said managing director Datuk Surin Upatkoon. “We would be interested to take over more shares but it all depends on whether there is anything available and at what price." ‘Our stake purchase in U Mobile is for investment purposes.’ “Our stake purchase in U Mobile is for investment purposes. We feel U Mobile has a lot of potential with STT’s entry as a strategic partner." (StarBiz)

CIMB Group Holdings, which will soon become the first foreign dual-listing on the Stock Exchange of Thailand, has revised its initial public offering (IPO) from up to 35 million CIMB shares to 50 million shares. The increase is to facilitate the eligibility of CIMB Thai to perform the role of selling agent for the proposed listing, in accordance with the relevant regulations in Thailand on the minimum size of offerings for distribution via bank branches. (BT)

HSBC Amanah Takaful (Malaysia), the Islamic insurance arm of HSBC Bank Malaysia Bhd, is poised to launch a new regular premium retirement plan in May that is expected to drive the company's growth for 2010. The takaful operator, whose regular premium collections increased by fivefold last year, expects the growth momentum to continue this year. "After a significant growth last year, we are bullish of getting more regular premium contributions," CEO Zainuddin Ishak said. (BT)

Bank Kerjasama Rakyat Malaysia is looking at the possibility of forming a strategic partnership with a leading cooperative in Brunei as part of efforts to set up operations there, marking its first foray into the foreign market. The country's only cooperative bank is likely to first push forward its Islamic mortgage franchise, the Ar-Rahnu X'Change before setting up banking branches.

• Bank Rakyat MD Datuk Kamaruzaman Che Mat said the bank is responding to an invitation from the Brunei government that is keen on seeing the bank set up branches for Islamic banking. The invitation was conveyed to Domestic Trade, Cooperatives and Consumerism Minister Datuk Seri Ismail Sabri Yaakob during his official visit to the country recently. 
• "However, we have yet to shortlist which cooperatives we intend to tie-up with at the moment, but discussions with potential parties are expected to be held in Brunei soon," he said. (BT)

AmInvestment Bank is listing four new call warrants this week, namely Ann Joo Resources, Berjaya Corp, Wah Seong Corp and Genting Singapore. All four have an issue price of 15-16 sen and a nine-month tenure. (BT)

AirAsia X (AAX) has not received the Government’s approval to fly to Sydney and Seoul although the long haul budget carrier had expected to fly to the Australian city by June this year.

• On Thursday chief executive Azran Osman Rani surprised many by lashing out on Twitter, alleging that “the (incumbent) is blocking us because they say that route must be protected. What we really want is a rational and clear policy on route allocation that is based on the interest of the country and not the interest of an individual airline”. 
• Presently, Malaysia Airlines flies 12 direct flights on the KL-Sydney route, while MAS and Korean Air codeshare on the KL-Seoul route with 12 weekly flights.
• MAS network senior manager Amin Khan has pointed out that “AAX can fly to many routes that are currently not served. For example, there are no direct services from KL to Manchester, Zurich, Madrid, Athens, Oslo, Vienna, Amman, Cairo, Pusan, Fukuoka, Nagoya, Nice and Oakland. We believe that AAX has requested and received approvals for many of these routes but they have not offered these services’’. (Star)

Malaysia Airlines has introduced online booking for nine more destinations in Europe. Customers arriving or departing Stockholm, Gothenburg (Sweden), Oslo, Sandefjord-Oslo, Bergen, Stavanger, Brussels (Belgium), Copenhagen (Denmark) and Helsinki (Finland) can now book and purchase their tickets online. These routes were already served through a partnership with KLM Royal Dutch Airlines, MAS ticketing offices or travel agents. (Star)

The Construction Industry Development Board (CIDB) is optimistic that the country's construction industry will achieve world-class status by 2015. Its CEO Datuk Hamzah Hasan said based on the Construction Industry Master Plan 2006-2015, the sector is on track to reach its target. The growing number of Malaysian companies embarking on projects overseas over the last two decades provides a further boost to this. Majority of the projects are in the Middle East and North Africa, mainly in Saudi Arabia, the United Arab Emirates, Qatar, Bahrain and Libya. Master Builders Association Malaysia president Ng Kee Leen said issues affecting local construction firms overseas are track record and funding. (BT)

UMW Corporation, which markets the Pennzoil lubricants in Malaysia and is actively involved in motorsport activities, is now concentrating to penetrate the passenger car motor oil (PCMO) market, with a target of cornering at least 20% of the segment. Its director for manufacturing and engineering division Azhar Harun said Penzoil is expanding its lubricant servicing network with the acquisition of new dealers, including spare parts and workshops nationwide. (Malaysian Reserve)

SP Setia plans to double its landbank in Penang from about 66 hectares currently and to develop more high-end projects in the state. Property Division (North) general manager S Rajoo said that the company has identified several pieces of land, both on the island and Seberang Prai. He said SP Setia hoped to acquire a piece of land in Gurney Drive before the year end and it also planned to develop super condominiums with a target price of RM2.5m each. (Malaysian Reserve)

Petra Perdana has appointed 46-year-old Shamsul Saad as MD. He worked for Sarawak Shell for 8 years, holding various portfolios in the company’s operations. He joined Petra Perdana in 2000 as a procurement manager and was a key player in the company's venture into marine business in 2004. He was appointed an executive director in 2009. (BMSB)

The Employees Provident Fund (EPF)’s recent moves to reduce its stake in KNM Group Bhd via disposals on the open market have piqued the market’s interest, especially when an offer for the stock at a higher price is still on the table.

• Recent filings with Bursa Malaysia showed that the EPF’s shareholding in KNM has been reduced to 10.38% as at March 30, compared with the 13.01% it owned on Dec 28, 2009. The EPF sold some 104m KNM shares in the first quarter, during which time the stock was traded at between a high of 81.5 sen and a low of 71.5 sen. The stock finished at 73 sen on Friday, two months after major shareholder Lee Swee Eng, along with two private equity funds, made a conditional offer for KNM’s assets that valued the shares at 90 sen apiece. 
• The offer from Lee’s vehicle BlueFire Capital Group Ltd (Bidco) remains on the table as KNM has told the exchange that the parties involved would endeavour to conclude discussions by April 16 after an exclusive period for due diligence expired on March 22. Speculation is swirling that the buyer may reduce the offer price or withdraw the offer completely. (Star)

Delloyd Ventures has targeted its revenue to nearly double to RM500m within three years, with its Indonesian oil palm and automotive ventures providing much of the impetus. Overseas business will grow markedly once it starts operating its own Indonesian oil palm mill in Pulau Belitung and relocates to a bigger auto parts factory in Jakarta as early as mid-2010, its senior executive said. It also expects revenue from its Thai operations to increase after it secures a supply contract from Ford Motor Co late last year. (BT)

Penang-based Ivory Properties Group, heading for a listing on Bursa Malaysia this year, is in the process of submitting the relevant documents to the Securities Commission (SC), a company official said. "The company had already gotten an approval earlier (from the SC) for this IPO listing but the timing wasn't right," a source close to the matter said. The company official, who declined to be named, said it expected to be listed by the middle of next month. (Financial Daily)