20120229 1012 Malaysia Corporate Related News.

The first generation independent power producers (IPP) "must agree to reduce capacity payment for the current concession" in order to extend the existing power purchase agreements by 10 years, said Energy Commission (EC) chairman Tan Sri Dr Ahmad Tajuddin Ali. However, he declined to reveal the quantum for the capacity payment reduction. The capacity payment of IPP are not known as they are not revealed to the public. (Financial Daily)

18 entities comprising individual IPPs or a consortium of IPPs have submitted bids to the Energy Commission (EC) for the supply of up to 1,400MW of power to the country by 2016 and 2017. Energy Commission chairman Tan Sri Dr Ahmad Tajuddin Ali said prequalification will be carried out and the results will be known by March 19. "Those successful will be required to build gas-fired plants in Peninsular Malaysia," he said. The initial tender will be for a 750MW gas-fired plant in Prai, Penang. Some 4,500MW of newly-installed capacity will come on board Malaysia's power sector by 2016 and 2017. Out of the 3,500MW of power being offered for tenders, 1,400MW are for gas-fired plants while the remaining 2,100MW can be for new combined-cycle or coal-fired power plants. (BT)

As bids come in for his power assets, it is already evident that Ananda Krishnan could net a gain of up to RM4bn from his surprise privatization of Tanjong just 19 months ago at a cost of RM8.8bn. Saudi Arabia & Electricity Co is said to have bid as high as RM10.85bn for Ananda’s power assets, reportedly the highest among 12 bids received. (Financial Daily)

1Malaysia Development Bhd, a state investment company, is among bidders for billionaire Tan Sri T Ananda Krishnan's power assets in an auction that may raise about US$3bn (RM9.04bn), two people with knowledge of the matter said. As many as four groups have been put on a shortlist to bid for the assets, said one of the people, who declined to be named as the process is private. (Malaysian Reserve)

Perushaan Otomobil Nasional Bhd (Perodua) says its inventory has risen and could impact production if the new lending rules are not reviewed. Managing director Datuk Aminar Rashid Salleh said the automotive ecosystem has been hit by the new rules as approval time for loans has lengthened and thereby affecting sales of automotive dealers. He proposed that the new guidelines, which came into effect on January 1 this year, be implemented in stages to soften the impact on both the players and consumers. Aminar said financial institutions should take into consideration the government's desire to see growth in the industry by increasing competitiveness as well as a better business environment for all in line with the soon-to-be announced revised National Automotive Policy.(BT)

CWorks Systems Bhd, controlled by Mohamed Ridzuan Nor Md, is in advanced talks to take over privately-held Kpisoft International Pte Ltd (KIPL). At least two people familiar with the matter confirmed that Kpisoft’s management had made a presentation to the Cworks’ board yesterday.” They are expected to sign a deal soon so that the due diligence process can take place. An announcement to the stock exchange should come in sometime this week,” said one of the sources. Kpisoft made headlines late last year when a rival listed company said that it had bought a stake in it. In Nov, Fitters Diversified Bhd told Bursa Malaysia that it had purchased a 30% stake in Kpisoft for RM6.5m. Kpisoft’s revenue for the current year is expected to be in the RM20m range and Kpisoft is projecting RM10m pretax profit this year. “Furthermore both CWorks and KIPL are both IT (information technology) platform companies, hence there is room for synergies,” said the source. BT understands that a deal will be done via a share swap and some cash, as Cworks has zero gearing. Mohamed Ridzuan owns just under 9% of Cworks but parties aligned to him control some 27%, and by gaining control of Kpisoft, Cworks will be able to pitch for bigger government jobs. Kpisoft, which does scorecard management for the likes of Telekom Malaysia, Tenaga Nasional, Petroliam Nasional, Malayan Banking, Sime Darby and the Securities Commission. (BT)

The oil and gas (O&G) output is likely to see an upswing within the next five years and continue to contribute significantly, together with the services sector, to GDP. Datuk Seri Idris Jala said last year, the sector declined by 5.7% and the lower oil output had affected economic growth. Idris said O&G is still Malaysia’s single largest sector and if we had no decline, the GDP growth last year could have been more than 6% or maybe 6.5%. The decline was mainly due to the maintenance works in Peninsular Malaysia and the drop in production of the Murphy Oil’s Kikeh field. (Bernama)

Bread and confectionery maker Silver Bird Group Bhd's board is understood to have suspended three key executives, including the managing director, one executive director and the general manager with immediate effect, pending the outcome of an internal investigation into what is alleged to be financial irregularities, sources said. At present, the details of the alleged financial irregularities are not known. Silver Bird is expected to make an announcement pertaining to the delayed audited financial results and the suspension of its senior officials today. (Financial Daily)

AirAsia X is set to axe its KL-Christchurch-KL route, after withdrawal from popular European and Indian cities earlier this year. Some claimed that the airline was making losses on the route although it did stimulate demand for the twice weekly flights to New Zealand. AAX seemed to be focusing on routes that were in the eight to nine-hour flying radius. (Star Biz)

PJI Holdings Bhd has won two contracts worth more than RM31m in total, which are expected to be completed by Nov-2013. The company received a letter of award from Ocean Electrical Co Sdn Bhd worth RM22.1m for works in Penang. and from Bina Puri Sdn Bhd to undertake a RM9m subcontract for the execution of electrical services for a project in Kota Kinabalu. (BT)


Genting enters banking sector
In its maiden foray into the financial sector, Genting has joined CIMB and two individuals as shareholders of an investment banking advisory outfit in Sri Lanka. Through wholly-owned Vista Knowledge Pte Ltd, Genting will have a 20% stake in CIMB Pte Ltd, which is 45% owned by CIMB Group via CIMB Securities International Pte Ltd. CIMB Pte Ltd's other shareholders are Alex Lovell (20%) and Reshani Dangalla (15%). In an announcement to Bursa Malaysia, CIMB Group said it had entered into a deed of accession to the JV and shareholders' agreement to facilitate Vista Knowledge's entry into the JV, which was formed last August. (StarBiz)

TNB to shine in Q2
Tenaga Nasional is expected to perform better in the current second quarter ending today, thanks to higher average gas supply from Petroliam Nasional (Petronas) as well as the RM2bn compensation as part of fuel cost-sharing mechanism. President and CEO, Datuk Seri Che Khalib Mohamad Noh, said TNB’s financial performance would be better, given that it burned less distillates and oil, which was 5x more expensive. (StarBiz)

Oriental says no plan to privatize
Oriental Holdings says it has no intention to go for a privatization or undergo a leadership change at this moment. Oriental was responding to a recent article which said that the diversified company could be a privatization target following a recent slew of corporate moves. (StarBiz)

MAHB mulls raising stake in Istanbul airport
Malaysia Airports Holding (MAHB) may raise its stake in Istanbul’s second largest airport, according to three people with knowledge of the situation. The companies that operate Sabiha Gokcen International Airport are working with Rothschild to manage a potential sale. The process is at a preliminary stage and the other owners – MAHB’s joint-venture (JV) partners GMR Infrastructure Ltd and Limak Holding AS – haven’t decide if they will sell their stakes, the people said. (Malaysian Reserve)

TSM Global gets takeover offer of RM159m
TSM Global has received a takeover offer worth RM159.2m, or RM1.25/share, from West River Capital SB, a company controlled by TSM’s substantial shareholders and directors Datuk Lim Kheng Yew and partner Lim Tze Thean. TSM said the offer will be paid wholly by cash. (Malaysian Reserve)

Kelington announces 25% payout dividend policy
Kelington Group has decided on a dividend policy that will seek to pay out 25% of net profit as dividends, the gas and chemical solutions provider said in a filing to Bursa Malaysia yesterday. The policy will commence from FY11. (Malaysia Reserve)

Maybulk confident of staying profitable
Malaysia Bulk Carriers (Maybulk) is expected to take advantage of the current depressed freight market by acquiring more vessels this year. “We are monitoring the situation. We plan to reinvest our profits and to take opportunity of the current depressed freight market. If the current situation continues, we expect to see more shipping companies to be in financial distress and maybe face bankruptcy,” said CEO Kuok Khoon Kuan briefing yesterday. (BT)


Axiata: Celcom posts RM2.1bn net profit
CelcomAxiata has registered a net profit of RM2.1bn for FY2011. The figure is 11% higher  when compared to the RM1.89bn recorded in FY2010. Revenue rose 6% to RM7.23bn from  the RM6.85bn posted in FY2010, driven mainly by higher subscribers on the back of an  attractive product offering of bundled packages. Its CEO Datuk Seri Shazalli Ramly said the  current revenue growth was the strongest since 4Q FY2009. He said Celcom closed the year  with 12m subscribers, adding 542,000 more in the last quarter. He added that Celcom has  allocated RM1bn for capital expenditure this year, to be largely spent on information  technology development. (Business Times)

IOI Corp: Plans refinery in Indonesia
A top official from IOI Corp said the company will build a refinery in Indonesia once it  generates enough feedstock from its plantations in Borneo island in the next 3 years.  IOI  Corp's group executive director Lee Yeow Chor, said the firm's two Indonesian units will plant  25,000 hectares a year over the next 3 years  - an ambitious target given it has planted  2,200ha in FY2011. With a market value of RM34.9bn, IOI Corp currently has about 95,000ha  in Kalimantan after venturing into Indonesia in 2007. (Business Times)

Genting: FY2011 net profit rises to RM5.14bn
Genting Bhd has registered a net profit of RM5.14bn for FY2011, compared to RM3.41bn in  the year before.  This was posted on a higher revenue of RM19.56bn, compared to  RM15.19bn in FY2010. On a quarterly basis, the group posted a net profit of RM1.41bn for 4Q FY2011, compared to RM806.17m a year ago.  The group's profit for the 4Q included a  reversal of RM308.6m in respect of previously recognised impairment loss related to the UK  casino licences and a net fair value gain of RM64.4m on derivative financial instruments. It  also included a loss on discontinuance of cash flow hedge accounting using interest rate  swaps of RM145.4m arising from settlement of interest rate swaps. On the higher full-year  revenue, it was led by higher revenue of the leisure and hospitality division in Singapore,  Malaysia, the UK and the US. (Business Times)

UEM Land: Records RM140.5m in 4Q earnings, unbilled sales of RM1.85bn
UEM Land  posted a 3.84% increase in earnings to RM140.56m for  4Q FY2011, from  RM135.36m, due to improved performance from the group's various development activities.  It said that the board was confident of the group’s prospects in the coming financial year as  the on-going projects had unbilled sales of RM1.85bn as at Dec 31, 2011. The profits from  these future billings will be recognised substantially over the next two financial years. The  group will also be launching several residential and commercial projects in the Klang Valley,  Cyberjaya and Nusajaya in 2012.  (Financial Daily)

Mah Sing: FY2011 profit rises to RM238.63m
Mah Sing Group's pre-tax profit for FY2011 was up at RM238.63m from RM177.865m in  FY2010. Revenue for the year also rose to RM1.57bn versus the RM1.11bn, previously. The  group said revenue from the property segment improved 48% y-o-y to RM1.4bn, while the  group's property sales exceeded an internal target of RM2bn to end at RM2.26bn. For 4Q  FY2011, the company recorded a pre-tax profit of RM57.28m from RM39.212m, previously.  Revenue for the three-month period also rose to RM422.126m from the RM299.284m recorded in the corresponding quarter of FY2010. (BusinessTimes)