Thursday, April 12, 2012

20120412 1130 Malaysia Corporate Related News.

Tower atop LRT station
In what may be Syarikat Prasarana Negara’s most ambitious project yet to unlock value from its real estate, the national public transport operator is partnering with a developer to build a billion-ringgit tower atop its Dang Wangi light rail transit (LRT) station. The project, won by Crest Builder Holdings and its 49% joint-venture (JV) partner Detik Utuh SB two weeks ago, is for the construction of a single-block mixed development fronting Jalan Ampang with a gross development (GDV) of RM1.0bn. (StarBiz)

Syed Zainal still MD, says Proton
Proton Holdings has said Datuk Seri Syed Zainal Abidin Syed Mohamed Tahir is still holding the position of group managing director of the national carmaker, and that his services are still required in the company. It was responding to a Edge Financial Daily report on Tuesday citing sources that Syed Zainal had resigned from the company. Proton in a statement on Tuesday said it was not aware of the speculation. (Financial Daily)

Seacera to buy 138-acre land in Semenyih
Ceramic company Seacera Group has proposed to buy a 138-acre plot of land in Semenyih, Selangor, for RM78.1m from Duta Skyline SB. The deal is expected to be completed within five years, said the company in its exchange filing on Tuesday. The land will be used for future property development, said the company. The amount will be settled via RM13m in borrowings, and the remainder from internal sources. (Malaysian Reserve)

Hibiscus Petroleum to enter Norway’s O&G scene
Lime Petroleum plc, jointly controlled by Hibiscus Petroleum, has signed a Letter of Intent (LOI) with North Energy ASA and Rex Oil & Gas Ltd to acquire a portion of North Energy's interest in four concessions, offshore Norway. Under the LOI, Lime is expected to sign a framework sale and purchase agreement with North Energy, which will detail the terms of the acquisition by 30 April. A special sale and purchase agreement for the interest in each concession is also expected to be signed subsequently, the company added. (BT)

Hong Leong Bank signs deal to dispose of MIMB
Hong Leong Bank has sealed a sale and purchase agreement with Hong Leong Capital to sell its 100% stake in MIMB Investment Bank (MIMB) for RM157.9m. The proposed acquisition is part of an exercise to rationalise the investment banking businesses involving MIMB and Hong Leong Investment. The deal is expected to be completed in the second quarter of this year, Hong Leong Bank said in a statement to Bursa Malaysia on Tuesday. (BT).

Malaysia Target RHB Promising Islamic Banking Profits: Real M&A (Source: Bloomberg)
Potential buyers of Malaysia’s RHB Capital Bhd. (RHBC) can grab an increasing share of the biggest market for Islamic bonds at a 24 percent discount to the bank’s rivals. RHB, whose Islamic banking profits rose ten times faster than total earnings last year, will become Malaysia’s largest stock broker after its acquisition of OSK Investment Bank Bhd., according to data compiled by Malaysia’s stock exchange. As heightened competition from foreign lenders spurs mergers among Malaysia’s banks, the OSK purchase will further boost RHB’s allure, with the Islamic banking franchise also attractive for overseas bidders, Alliance Research Sdn. said. After a 19 percent drop since RHB’s merger talks with Malaysia’s two largest lenders ended in June, the bank is trading at 1.49 times book value, cheaper than all except one of its domestic peers, according to data compiled by Bloomberg.
RHB’s biggest investor, Malaysia’s Employees Provident Fund, would be willing to sell, Aberdeen Asset Management Plc said, while another s hareholder, Aabar Investments PJSC (AABAR), has gauged Sumitomo Mitsui Financial Group Inc. (8316)’s interest in its 25 percent stake, according to two people familiar with the matter. “It’s a takeover target and the OSK acquisition could make it easier to sell,” said Gerald Ambrose, who oversees 5.4 billion ringgit ($1.8 billion) in assets as managing director of Aberdeen in Kuala Lumpur. “It would have national coverage and good exposure to retail as well as investment banking. There are foreigners who want exposure here, and if you’re a foreign Islamic bank, you’d be better buying a local brand.”

The governments of Malaysia and Bangladesh signed an MOU for the construction of Padma Multipurpose Bridge spanning 6.15km across the Padma River in Bangladesh. Estimated cost is RM9bn, and will be fully undertaken by Malaysian contractors. "We have a few contractors in mind, (the names) will be submitted to a special Public Works Department committee. As soon as the contractors are chosen, we will take them to Bangladesh where we will have direct negotiations with the government of Bangladesh," Former Works Minister Datuk Seri Samy Vellu, who is also Malaysia's special ministerial envoy to India and South Asia, said. Five contractors will be joined together to form a consortium. "I have spoken to UEM, MRCB, PAG Consult, Eversendai, and particularly, the contractors currently building the second Penang bridge may come on board on this project," he said. The selection process will be completed in two or three weeks. The project is entirely privately funded by the contractors. The contractors will be able to collect toll from the bridge on a concession basis for 35 to 40 years. The bridge will be road and rail-ready. It will be the largest bridge in Bangladesh and the first fixed river crossing for road traffic, and is expected to be completed in 54 months. (Starbiz)

Maybank's wholly-owned subsidiary, Maybank Investment Bank (Maybank IB), intends to acquire a 17.2% in Saudi Arabia-based Anfaal Capital for 10.52m Saudi riyals (RM8.6m). It will purchase the stake from Saudi Arabian company, Al Numu Real Estate Company, which is a real estate investment and management company. In a filing to Bursa Malaysia, Maybank said it has entered into a conditional sale and purchase agreement with Al Numu and Anfaal for the purchase of the equity as well as for the proposed assignment of the subordinated loan of 2.07m Saudi riyals (RM1.6m) from Al Numu to Maybank IB. Maybank IB, which already has an 18% share in Anfaal, will hold 35.2% interest in the company upon completion of the share acquisition. It said the proposed acquisition would enable Maybank IB to increase its presence in Saudi Arabia, representing a good opportunity for the investment bank in the area of syndication, sukuk structuring and project financing in the country. (BT, BMSB)

Malayan Banking Bhd (Maybank) said it is keeping its options open in bidding for Al Amanah Islamic Investment Bank of the Philippines, the country's only Islam-oriented commercial bank, a Philippine-based newspaper reported. Al Amanah Islamic Bank is looking for a strategic partner through the sale of a 49% stake or the entire bank to a foreign entity with expertise in Islamic banks. Maybank told the Philippine-based newspaper that it wanted to expand further in Asean region while strengthening its hold in the Asia-Pacific region. (StarBiz)

Malaysia has seen an unprecedented boom in the issuance of private debt securities (PDS) in the 1Q12 on the back of several record-breaking bond offerings. As at end-March, the total value of gross PDS issuance came up to RM39bn, according to RAM Rating. This more than tripled that of the corresponding quarter in 2011 and also surpassed the RM31.2bn recorded in the 1H11. The achievement was underpinned by PLUS's RM23.4bn bond issue, which represented the world's biggest sukuk at the time of its issuance in Jan. Other noteworthy issues included Tanjung Bin Energy Issuer Bhd's RM4.5bn sukuk murabahah, Abu Dhabi National Energy Company PJSC's RM3.5bn sukuk and Maxis's RM2.5bn sukuk musharakah. Trading interest in the secondary market was mainly confined to the utilities sector, with PLUS having the most actively traded bonds. (BT)

RHB Capital hopes to conclude its takeover of OSK Investment Bank in the third quarter this year, its chief said. It is also aiming to complete its planned purchase of Indonesian lender PT Bank Mestika Dharma in the same quarter, but may re-think its options in that country if regulatory approval for the deal does not come by June. In a separate meeting with the media after the group's AGM, OSK Investment Bank chief executive officer U Chen Hock said that there is no reason the planned merger should not get the nod from the authorities. Meanwhile, Kam dismissed market talk that non-bank lender Malaysia Building Society Bhd may be merged into the RHB group. "No, there's nothing on the table," he said. Kam's target is for the OSK merger to be earnings accretive to RHBCap in "18 to 24 months" after it is completed. (BT)

Takaful Ikhlas expects its operations in Sabah and Sarawak to contribute up to RM50m this year, its president and CEO, Datuk Syed Moheeb Syed Kamarulzaman says. The company, a subsidiary of MNRB Holdings , foresees a lot of potential from the states, due to the low penetration rate in the individual family business there. Among initiatives planned by the company to increase its presence in the states include appointing more agents and a dedicated person or department. "For the financial year ending March 31 2013, Takaful Ikhlas targets Sabah and Sarawak to contribute about RM20m to RM25m each," Syed Moheeb said. Last year, the company raked in RM37.7m in contributions from the markets. Contributions from the family business in-force from Sabah and Sarawak as at December 2011 reached RM28.9m, while that of general business stood at RM8.8m. Takaful Ikhlas has 462 agents in Sabah and 420 in Sarawak, but most of its business comes from financial institutions. (BT)

Former finance minister Tengku Razaleigh Hamzah has warned that listing FELDA Global Ventures Holdings (FGVH) on the bourse would only expose it to market risks such as share manipulation. According to Harakah Daily today, the senior Umno leader said FELDA settlers could be left penniless if they were to be influenced by syndicates manipulating Felda's share prices. "We fear that these settlers would be influenced by the games of these syndicates. When the share prices are low, surely many settlers interested would make big purchases and even take bank loans for it. "They would do this with the assumption that they would reap huge profits once the share prices soar. But we must remember that the prices would not stay high forever," Razaleigh was quoted as saying today in the PAS organ. When the prices drop, those who had invested heavily would be left in a lurch. "I am concerned and do not know how the government plans on keeping these share market manipulations in check, and in the end, these settlers would be the ones to lose out," he said, according to Harakah. (The Malaysian Insider)

Umno Youth has proposed that the National Higher Education Fund Corporation (PTPTN) do away with the 1% interest rate for loans. Its chief Khairy Jamaluddin said the 1% interest rate meant for PTPTN's administration fee was a lot more than the actual operating expenditure of the corporation. “We were told that it only costs PTPTN RM65m a year to operate and to pay its overheads, so the 1% interest rate from the billions given out every year is far more than needed. “We hope that the PTPTN borrowers will not be saddled with extra debt and only pay their principal loans,” he said. PTPTN COO Wan Ahmad Wan Yusof said loan default amounted to RM24.7bn at present. (Star)

Wilmar is developing a palm oil-based aviation biofuel in the company’s biofuel plant in Gresik, East Java with an investment of about US$80m, company executive said. The company, through its subsidiary PT Wilmar Nabati Indonesia, is collaborating with Elevance Renewable Sciences Inc, a US-based company to produce the aviation biofuel. (The Jakarta Post)

DRB-Hicom has sent in a five man-strong post-acquisition team to evaluate and study the inner dealings in Proton Holdings, said an industry source. It is learnt that the team is headed by Datuk Lukman Ibrahim, DRB-HICOM’s group chief operating officer. Business Times was told that the team which reported for duty to Proton managing director Datuk Syed Zainal Abidin Syed Mohamed Tahir on Monday, does not have a management role. Rather, they are there to understand how the Proton management operates. “It is not a financial due diligence, but they are going through all the impending deals on the table for Proton. They are particularly interested in how Lotus is being managed, and also Proton’s potential tie-ups in China and with General Motors Company (GM),” said another source from Proton. “They are not saying yes or no to the deals, but they want to know the rationale behind Proton management’s train of thought,” added the source. (BT)

Naza Kia Malaysia is targeting an annual sales growth of 40% to 18,000 units this year as the company expects an improvement in its inventory. “The main catalyst will be the overall improvement in the stock or supply situation as compared with last year,” CEO Datuk Hafiz Syed Abu Bakar said. He pointed out that Kia’s global sales last year grew 51% compared with 2009. On the local front, Hafiz said Naza Kia was seriously studying the possibility of introducing vehicles in the “A” and “B” segments, where the company was still unrepresented. (Star Biz)

Thai AirAsia plans to launch an IPO in the Thai market in May, its financial adviser said. “It should be an active year for investment banking and we have Asia Aviation, a major shareholder of Thai AirAsia, which will go public in May,” Suvabha Charoenying, Thanachart Securities MD said. Thai AirAsia CEO Tassapon Bijleveld said he expects to raise US$150m-200m from the share offer. Asia Aviation Pcl, a holding company which owns 51% of Thai AirAsia, will offer 750m new shares or 15.46% in the IPO. After the share offer, holding of AirAsia Investment, a wholly-owned unit of AirAsia, will be reduced to 45% from 49% because AAI had decided not to subscribe new shares of Thai AirAsia. (Reuters)

MMC Corp Bhd is currently doing its due diligence exercise on Keretapi Tanah Melayu Bhd (KTMB) for the purpose of taking over and turning around the ailing rail operator, according to a source. "It is expected that the changes [in top management at KTMB] will happen after MMC is satisfied with its study which will take a few more months to complete. MMC then needs to present its case on how to turn around the company to the Government and get its green light to the take over," said the source. However, the privatisation idea was greeted by negative response from the Railwaymen Union of Malaya, which argued that it was not right for KTMB to let the national railway to be operated by a private party. (StarBiz)

British American Tobacco (M) Bhd (BAT) is optimistic of regaining its market share at 69.7% which was achieved about 12 years ago. The tobacco giant’s market share dwindled below to 60% between 2000 and 2009, but it had gain steam and seen an increase in market share in the past two years. BAT market share went up by 0.4% in 2010 and by 1.3% in 2011. Its current market share is 61.1%. “We have a robust strategy put in place two years ago and it had worked well for us. “Last year we were the only tobacco company to have increased our market share in Malaysia and we promise we will increase market share again this year barring any unforeseen circumstances,” managing director William Toh said. The group is confident of sustaining its market share growth momentum although it noted that the industry anticipated further challenges as it battled contraband cigarettes and higher operating costs. (Starbiz)

Several Indian companies are courting Scomi Group for a possible joint venture to set up a monorail-related manufacturing plant in India, amid growing demand for the infrastructure service here. "We are already talking to several potential partners for a joint venture to set up a manufacturing facility in India..." Grp CEO Shah Hakim Zain said. There is volume for such facility in India as the market size for monorail business in India is estimated at a whopping US$15bn (RM46.1bn) over five years, he said. Listing its India unit on the Bombay Stock Exchange was another option for Scomi as it expanded its footprint in the region, he said. Back home, he said the government's decision to revive the Putrajaya monorail project depended very much on the traffic growth in the administrative capital. (BT)

MNRB Holdings is drafting a five-year plan to drive the reinsurance group to the next level of profitability. President and CEO Mohd Din Merican said the plan to be unveiled "soon" would include creating synergy among the group's subsidiaries. This, he noted, would ultimately lead to better cost savings and better returns for the group, whose largest shareholder is Permodalan Nasional Bhd (PNB). (BT)

The Belawan port in North Sumatra province and the Dumai port in Riau are operating normally after an 8.6 magnitude quake struck near the northern part of Sumatra island today, Taufik Fadillah, a spokesman at the ports’ operator Pelabuhan Indonesia I, said by telephone. (Bloomberg)

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