20110902 1102 Malaysia Corporate Related News.

Sime Darby has purchased an approximately 30% stake in developer  Eastern and  Oriental  (E&O) for RM766m. The deal works out to be RM2.30 per E&O share or  approximately a 20% discount to E&O’s estimated Realisable Net Asset Value (RNAV) of  RM3.2bn. Sime Darby said in a statement today that it will acquire the stake from Dato’  Tham Ka Hon, the Managing Director of E&O and several other major shareholders of  E&O. The two companies also entered into a three-year collaboration agreement  to  formalise a broad collaborative framework with regard to their property development  businesses. “The decision to acquire the shares is  aligned with the Sime Darby Group’s  strategic direction to extend its presence in the property development and hospitality  sectors, beyond the Greater KL region, specifically  in Penang and Johor,” said Sime  Darby. (Malaysian Insider)    

Genting Group is further expanding its presence in Miami, Florida several months after it  unveiled its US$3bn Resorts World Miami mixed development project. Its latest acquisition  was in mid-August when it purchased a 17,500-sq-ft plot of land north of downtown Miami  for US$1.25m from former Sony Music executive Tommy Mottola. Genting’s 42%-owned  investment holding company Two Digital, had acquired the property. Miami-Dade County  property records showed Two Digital had also in August earlier acquired 3.6 acres of  mostly vacant land for US$29.4m. The 3.6 acres of land is within walking distance from the  Miami Herald headquarters building acquired by Genting. (Financial Daily)    

The development of new casinos and resorts in Singapore is not expected to materially  cannibalise the performance of  Genting’s Resorts World Malaysia given its monopoly  operation in Malaysia, according to Moody’s Investors Services. Moody’s said the outlook  for Resorts World Malaysia was stable. “Moreover, about 70% of Resort World's revenues  come from day-trippers and local residents. These customers are less mobile and form a  stable base for the Malaysian casino's revenue streams,” it said in a report. Moody's said  the outlook for the Asia-Pacific gaming sector was stable with a positive bias. (Financial  Daily)      

Johor Premium Outlets (JPO) in Kulaijaya is set to open its doors to shoppers on Nov 11,  or the auspicious 11-11-11 date.  Genting senior manager (Strategic Investments) Jean  Marie Pin Harry said that initially, JPO would offer about 80 branded items. "Shoppers will  enjoy between 25% and 65% discounts on branded items all-year round," said Pin Harry.  (Asiaone)    

Following the EPF's foray into overseas property markets,  Lembaga Tabung Haji and  Permodalan Nasional Berhad are looking to do the same and have sent out feelers about  this, industry players said. Like the EPF, both funds are looking to buy into existing premium properties for their yield. And also like the EPF, both had targeted London as their  first choice, followed by Australian cities, the insider said. (Starbiz)  

Tan Sri Khoo Kay Peng plans to take Pan Malaysian Industries (PMI) private, by buying  the remaining 44.2% stake he does not own for RM25.11m or 4.5 sen a share. In a Bursa  Malaysia announcement, PMI said it has received an unconditional takeover offer from a  consortium of three companies, namely Soo Lay Holdings, Hong Kong-incorporated  Norcoss and Cherubim Investment (HK), to acquire the remaining 558m shares it does not  own.  
• PMI,  a conglomerate, was formed 25 years ago. Today, its businesses include  Metrojaya and Laura Ashley retail outlets; 10 hotels in the UK and two in Malaysia,  including Corus Hotel KL; brokerage PM Securities Sdn Bhd; property development as  well as food and confectionery. Almost all of its businesses are profitable. (BT)  

Maxis  has lowered its capital expenditure (capex) for the year as its "disciplined" costmanagement programme has helped it save cost without jeopardising expansion plans.  
• The company, whose mobile voice network covers more than 95% of the country,  aims to expand the coverage and quality of its wireless broadband network, as well as  other services. Initially, Maxis had set aside RM1.5bn capex for this year. However,  during the announcement of the first quarter results three months ago, it shared that  cost-saving measures had resulted in reduction in capex to RM1.3bn. For the first half  this year, it spent RM482m on capex.    
• The company, which expects its non-voice revenue to contribute 50% of total revenue  by end-2012, now has a non-voice revenue contribution of 42.4%. Non-voice revenue  includes text messages, music downloads, Internet and data services. Its push on  smart phone packages, tablet packages, and wireless broadband is showing results,  as its Internet and data services now contributes 58% of non-voice revenue. (BT)  

Former MD of Sime Darby Plantation, Datuk Azhar, has been appointed as CEO of MRT  Co, a Ministry of Finance incorporated company.  MRT Co will be the project and owner of  the Klang Valley My Rapid Transit project effective 1 Sept 2011. (Bernama)    

Glomac Bhd’s Group managing director cum chief executive officer Datuk FD Iskandar FD  Mansor Iskandar said prices of properties in Malaysia have not "skyrocketed" as compared  with Hong Kong, China and Singapore. "We are in a highly-regulated industry so it won't be  possible to have an asset bubble here," Iskandar said. He said in general, property prices  in the local housing have been increasing by 5% to 10% per year, which he described as  healthy. He is confident that Glomac will record strong double-digit growth of 30% in the  next two years, led by sales from its current projects. (BT)  

The search for Malaysia Airlines' (MAS) new chief appears to have ended. It is learned  that the executive committee decided on the new managing director (MD) after a meeting.  Ahmad Jauhari Yahya, the former CEO of power producer Malakoff, has been offered the  job to lead the national airline.  
• However, it is unclear if he will take on the job since he has other interests to pursue, said sources familiar with the situation. Ahmad Jauhari is no stranger to the airline  industry since he also sits on the board of Malaysia Airports Holdings.  
• It is understood that Mohammed Rashdan Yusof, the new MAS executive director,  was also on the shortlist. Sources also said that Datuk Kamarudin Meranun, the cofounder of budget carrier AirAsia Bhd, and Datuk Seri Shazalli Ramly, CEO of mobile  operator Celcom Axiata Bhd, too, were considered for the job. (BT)    

The opposition has derided Putrajaya’s plan to hire a public relations firm to boost popular  support for nuclear power as more spin from an administration that they claimed was  becoming known for more talk than action. PKR communications director Nik Nazmi Nik  Ahmad said the revelation that the government will  pick one of three shortlisted public  relations agencies to help get greater buy-in for its planned nuclear power plants showed  that the Najib administration was still more concerned with form over function. “That  speaks volumes about what the Najib administration is about. It’s about PR,” he added.  (Malaysian Insider)    

Sarawak has introduced a new land management system modelled after  Federal Land  Consolidation and Rehabilitation Authority (Felcra) to develop Native Customary Rights  (NCR) land in the state. According to state land development minister Tan Sri Dr James  Masing, the pilot project involving the new land management model was carried out in  Pasai Siong, near Sibu. He said under the new land management model, NCR landowners  would hold 90% shares, with the remainder to be held by Sarawak Land Custody  Development Authority (LCDA). Felcra will source all the funding required and will only  charge management and marketing fees. (Starbiz)    

Labelling of  vegetable oils in the US, Europe and Malaysia has been accepted as  the  industry norm due to health reasons. However in other parts of the world, such as Australia  and New Zealand, the vegetable oils labelling is not carried as there are no laws requiring food manufacturers to do so. Since 2009 however, some of Australia's lawmakers have  been taking steps to change all that. They want to ask food manufacturers to specify the  vegetable oil content, especially palm oil. This has riled up Malaysia, which sees the move  as unfair and discriminatory and can be seen as a non-tariff barrier on palm oil. Plantation  Industries and Commodities Minister Tan Sri Bernard Dompok said it is okay to label palm  oil on food products but Australia must compel other vegetable oils to do the same. The  playing field must be fair. (BT)  

State-owned  POIC Sabah inked a memorandum of understanding on the Joint  Development of EFB (Empty Fruit Bunch) Treatment in Sabah with Kuala Lumpur-based  Global Green Synergy (GGS) to boost up-take of value-adding industries using  oil palm  biomass. POIC Sabah, which is involved in the development of the palm oil industrial  cluster in south eastern Lahad Datu (POIC Lahad Datu) since 2005, is determined to make  a success of the waste to wealth philosophy in the mass utilisation of oil palm biomass.  GGS, which is at the forefront of biomass utilisation in Malaysia, has been exporting fibres  from empty oil palm fruit bunches and is involved with Malaysia Palm Oil Board in a pilot  project in Perak to produce pellets from palm fibres and palm kernel shells. (Starbiz)  

The Malaysia Automotive Institute (MAI) is collaborating with various local universities to  develop skilled human capital for the Malaysian automotive industry. MAI CEO Madani  Sahari said MAI had been collaborating with several local universities to develop  programmes for five levels of talent within the manufacturing sector, namely executives,  engineers, designers, technicians and operators. (Starbiz)  

Up to 60% of Malaysians between 20 and 40-years-old are planning to buy life or health  insurance  products in the next 12 months, representing huge business opportunities for  insurers here. The Generation X and Y segment's strong need for insurance and financial  planning is fuelled by worries about medical expenses and the risk of living longer, a  survey sponsored by global reinsurance firm Swiss Re revealed. The study shows that  61% of the respondents in Malaysia are concerned about the amount they have to pay for  medical expenses relating to major illness, while 62% are concerned that their medical or  health insurance premium will increase beyond their affordability in the future.  (BT)  

A US-based private equity firm is eyeing a  forest plantation project in Sarawak. The  investor plans to invest as much as US$200m to grow highly commercial timber.
• The investor may also like to have local partner and get involved in the whole process  from growing timber, felling, processing, manufacturing and exports. (BT)  

Standard & Poor has lowered MISC’s long-term corporate credit rating to 'BBB+' from 'A-'  with a negative outlook.
• S&P cautioned the inherent risks of the shipping industry, which was volatile and  capital intensive, plus existing global overcapacity and MISC's leverage.
• The outlook also factors in some uncertainty surrounding the company's capital  expenditure plan, which includes a significant expansion in its petroleum tanker fleet, a  segment that is more volatile than the stable LNG business. (Financial Daily)  

English Premier League soccer champions  Manchester United's US$1bn initial public  offering in Singapore will use a two-tier share structure, the Financial Times reported. The  newspaper cited people with knowledge of the transaction as saying the ability to use a  dual share structure was an important reason for the club's decision to switch the IPO from  Hong Kong to Singapore. A two-tier structure, in which some shares have more voting  rights than others, will minimise the influence of outside shareholders over the U.S.-based  owners, the Glazer family. (Reuters, Financial Daily)

Technip eyes USD1bn oil & gas contracts in Malaysia
France’s Technip is eyeing contracts worth about USD1bn (RM2.98bn) in the Malaysian oil and gas industry this year. Top on the list of projects that Technip has tendered for is the Malikai deepwater project offshore Sabah, the third deepwater development in Malaysia after Kikeh and Gumusut-Kakap, also located offshore Sabah. The company, via its Malaysian unit, is bidding for the tension-leg platform (TLP) for the Malikai deepwater development offshore Sabah. (BT)

Glove makers set to raise prices
Rubber glove makers are set to raise prices of their products, in view of costlier labour, fuel, packaging and a weakening US dollar. According to Malaysian Rubber Glove Manufacturers Association (Margma) president Lim Kwee Shyan, “fuel and labour costs have gone up considerably. The US dollar, too, has weakened further against the ringgit by around 10% from a year ago.” In view of the higher costs of doing business, Lim said Margma has had no choice but to advise members to adjust glove pricing accordingly. (BT)

US private equity firm eyeing forest plantation project in Sarawak
A US-based private equity firm is eyeing a forest plantation project in Sarawak. Malaysian Timber Council CEO Cheah Kam Huan said should the plan go through, the investor plans to invest as much as USD200m (RM596m) to grow highly commercial timber. The investor may also like to have a local partner and get involved in the whole process from growing timber, felling, processing, manufacturing and exports. He, however, declined to reveal the identity of the private investor. (BT)

Harrisons to return RM34.25m to investors
Harrisons, a consumer goods distributor, plans to return RM34.25m to its shareholders as a special interim gross dividend, equivalent to RM0.50 a share. The dividend will go ex on 20 Sept and the entitlement date is 13 Oct. Harrisons, which also has shipping and warehousing business, had some RM114m in cash at the end of last year and debts of about RM35m. (BT)