20120621 1007 Malaysia Corporate Related News.

RM160bn to lift rail transport
Malaysia's railway industry will pump up to RM160bn in total investment between now and 2020 to develop the rail infrastructure, said the Land Public Transport Commission (SPAD) yesterday. “The government has invested more than RM50bn in rail transport since the 1990s. Investment for future rail projects is estimated to reach RM160bn by 2020,” said SPAD chairman Tan Sri Syed Hamid Albar. (BT)

All eyes on NAP
Indications are that some aspects of the revised National Automotive Policy (NAP) will soon make its appearance, ending the long wait for liberalization of the sector. One government source said phases of the NAP were expected to be announced soon and would include a liberalization of the segment below 1,800cc, making it more attractive for new players to enter the marketplace. (StarBiz)

KUB bags RM12m government job
KUB Malaysia has secured an RM11.7m contract from Home Ministry to supply printing materials such as toners and consumables to the Royal Malaysian Police (RMP). In a statement to Bursa Malaysia, KUB said the two-year contract will contribute positively to its earnings n the 2012 financial year ending 31 Dec. KUB said the contract has minimal risk as it is based on the current and immediate requirement for these materials by the ministry for the RMP. (Financial Daily)

MRT Corp receives 7 bids for 2 tenders
Mass Rapid Transit Corp (MRT Corp) has received seven bid for two tenders, namely power supply and distribution (PSD) and track works, for the 51km Sg Buloh-Kajang line. The tenders, which closed on Monday, saw four parties bidding for the PSD tender while three submitted for track works, MRT Corp said in a statement. (StarBiz)

MISC sees return to profit
MISC, a Petronas subsidiary, is confident that it will register better quarters ahead and return to the black after it completes its exit from the liner business at the end of this month. Chairman Datuk George Ratilal also said that the company has sold 10 of its container ships, while another six are in the sale negotiation process. "The sale started from the time that we announced the cessation and a lot of our ships are pretty much sold. There are still some left," he said after MISC's annual general meeting yesterday. (BT)

Wah Seong trumps Pansar, Lim for Petra Energy Stake
Energy infrastructure group Wah Seong Corp is set to acquire Perdana Petroleum’s strategic 26.9% interest in Petra Energy after outbidding Sarawak-based Pansar and influential businessman Datuk Desmond Lim Siew Choon, financial executives close to the deal said yesterday. Wah Seong has offered to pay about RM1.70 per share for the 57.7m share in Petra Energy, valuing the deal at RM98.1m. This represents a slight premium over the company’s net asset value, which amounts to RM93.5m, or RM1.62 a share. (Financial Daily)

Bumi Armada picks Nam Cheong to build 4 vessels costing RM410.6m
Bumi Armada is expanding its fleet for the offshore support vessel market and it has appointed Singapore's Nam Cheong Ltd to build four vessels costing a total of USD130m (RM410.67m). It said on Wed it had issued a letter of intent to Nam Cheong's unit Nam Cheong Dockyard SB to build four multi-purpose platform support vessels, with an option for four additional units, at USD130m. (StarBiz)

Maxis: To focus on key markets
Maxis’s CEO Sandip Das said the company will focus on key markets such as the immigrant, student and tourist segments and the Sabah and Sarawak region where growth is still attractive. He said there were a few markets we did not prioritise in the past. He said the markets were the immigrant market, Sabah and Sarawak and parts of eastern Malaysia like Kuantan. In referring to the immigrant market, he said that's a floating population of anywhere between 2m to 4m people, and it gets refreshed every few years. He said the first thing the integrated telco did last year to capture this burgeoning sector was to rationalise its international direct dialing rates to match the competition, leading to almost 600% growth in some areas. Sandip added that Maxis did not have a strong network in Sabah and Sarawak previously but had rectified that this year. On the tourist market, he explained that as Malaysia attracted more visitors, they are determined to get our rightful share. He said this would be done by offering better roaming rates. (StarBiz)

Felda Global Venture: Dreyfus portion taken up by other investors
A business executive familiar with the matter said the 2.5% stake in Felda Global Ventures Holdings (FGV) that was previously offered to Louis Dreyfus Commodities Asia has been offered and snapped up by other investors. However, he added that this does not mean that Louis Dreyus will stay out  of FGV as it is still keen to acquire a small stake in the future. According to him, Louis Dreyfus is unable to invest in FGV as the IPO stage because it was unable to confirm its interest before the closing date of the institutional offering on June 13. The reason was due to the company and FGV needing more time to iron out the details of a strategic partnership. (Financial Daily)

DRB-Hicom: Ex-CEO of Lotus sues for wrongful termination
Dany Bahar, the flamboyant and allegedly free-spending former CEO of Group Lotus plc, has reportedly decided to sue DRB-Hicom, the ultimate owner of Lotus, for wrongful termination. According to Swiss newspaper Bilanz, Bahar  filed the suit in London’s High Court. Bahar’s legal suit comes amid reports that he had misused company money to renovate several properties that he owned, as well as to pay for private aircraft. According to some UK news reports, Bahar was paid a guaranteed annual package of at least £1.2m (RM6m). Bahar assumed the position as chief executive in 2009 after he was roped in from Fiat SpA’s Ferrari. DRB-Hicom declined to comment for this article. (Business Times)

MBM Resources: Expects RM180m capex this year
MBM Resources expects its capex to be RM180m for this year, the highest in the group's history. Its group MD Looi Kok Loon said this was part of the RM250m capex for 2011 to end-2013 as it accelerates its transformation into a complete automotive group. He said this expansion would also hinge on the revised National Automotive Policy (NAP) to be announced. (StarBiz)

MAA Group: Explore private equity as new business
Having disposed of its key insurance arm, MAA Group’s forte will remain in asset management. Executive chairman Tunku Datuk Ya’acob Tunku Abdullah said the group is currently studying the possibility of a private equity business. However, he said the group will not be making any acquisitions until after September 2013 as the proceeds from the disposal of MAA Assurance are subject to escrow until the said date. (Financial Daily)

Scomi Group: MARC downgrades Scomi Group’s RM500m debt notes
Malaysian Rating Corporation (MARC) has downgraded its rating on Scomi Group's RM500m medium term notes (MTN) programme to BBB+ from A. The ratings agency said on Wednesday that the rating continues to be maintained on MARCWatch Negative. The rating action affects RM200m of outstanding notes. It said the downgrade in Scomi's rating reflects noteholders' rising susceptibility to event risk as a result of a delay encountered in the completion of its announced divestments of equity in subsidiaries,  Scomi Nigeria Pte Ltd (SNPL) and Oiltools Africa Ltd (OAL). It added that the delay in its asset disposal programme had impacted the timeline for Scomi's proposed partial refinancing of the outstanding notes as the refinancing transaction hinged upon the completion of its asset disposal plan. (StarBiz)

Salcon: Mulling more M&A in China
Fresh from its acquisition of water assets in China, Salcon is still on the lookout for M&A opportunities in a bid to speed up the listing of its Chinese water assets in the next two years, the company’s executive director said. Datuk Eddy Leong Kok Wah said that they are in talks with one or two groups for a potential merger. Salcon plans to list its Chinese water assets in the next two to three years. It aims to increase its combined capacity to 3,000m litres per day by then. (Financial Daily)

Konsortium Logistik: Eyes 20% growth
Konsortium Logistik’s CEO Datuk Che Azizuddin Che Ismail said the company is eyeing up to 20% revenue increase for FY2012. He said the group was upbeat on its business outlook, driven by its two initiatives -- Asean Logistic Park (ALP) and Regional Distribution Hub. He said the ALP in Sadao, southern Thailand, will be the distribution hub to cater for crossborder movements between Malaysia and Thailand while Regional Distribution Hub at Westport will serve as a dedicated logistics facility for specialised products. He said the group targets the movement of 4,000 containers per month for its ALP initiative. Che Azizuddin also said the group managed to secure several contracts in 1Q 2012, including a RM120m chartering contract with a major client in the power generation sector. (Business Times)

Focus Point Holdings: Eyes more franchising deals in Indonesia
Focus Point Holdings is finalising franchising deals in Indonesia as the group seeks to expand its business across Southeast Asia. President of Focus Point Holdings group Datuk Liaw Choon Liang said they have already set up three branches in Brunei, adding that they are in the midst of finalising franchise deals in Indonesia. The CEO of Focus Point Vision Care Sdn Bhd, Kim Ng said the potential partners must be professional and committed. As to whether there were plans to expand in Malaysia, she said the group was cautious due to the uncertainties in the economy and competitive retail market. (StarBiz)

Kumpulan Hartanah Selangor: Optimistic of positive growth this year
Kumpulan  Hartanah Selangor (KHSB)’s Chairman Raja Idris Raja Kamaruddin  said the company is optimistic of positive growth this year as the company embarks on the development of prime commercial land in Petaling Jaya. He said joint development plans of the 3.84 hectare piece of land in the heart of Section 14, Petaling Jaya, was currently being finalized. He said the development of shop offices, small-office-home-office (SOHO), office tower and service apartments will begin by year-end and contribute close to RM1bn in GDV over 7 years. Raja Idris also said several proposals have also been received for the development of 2,000 hectares of land in Bestari Jaya (Batu Berjuntai) in Selangor. (Bernama)

Kumpulan Perangsang Selangor: To divest slower yielding investments and assets
Kumpulan Perangsang Selangor (KPS) is looking at divesting slower yielding investments and assets to reorganise its portfolio. KPS chairman Raja Idris Raja Kamarudin said these include its 20% stake in Sprint Highway which it acquired in 2002 at RM130m. He said the company has not decided on the status of its stake in Sprint, but indicated that talks are on-going with certain principals of the assets. While Sprint has yielded returns since KPS bought the 20% stake in 2002, the proceeds have been  used to repay KPS' borrowings. Looking ahead, Kamarudin said proceeds from any possible divestments will be channelled to other fasteryielding investments instead of being used to reduce the group's debt obligations. He said the money is better utilised to generate income from new investments instead of being used to save on interest rates. (Financial Daily)

Prestariang: Eyes M&As to expand value chain
Prestariang is looking into mergers and acquisitions (M&As) to complete its softwaredeveloping and training value chain. Executive director Abu Hasan Ismail said on Wednesday that due to its strong cash position, it would look into M&As and also focus on further developing its intellectual property. He said Prestariang was in search of partners to enhance its products and grow its education business, which would provide long-term recurring income. On the dividend policy, Abu Hassan said the group intended to distribute quarterly interim dividends this year, instead of a final dividend. He added Prestariang's dividend policy would remain above 50% and this should not impact the company's cashflow. (StarBiz)

Automotive: All eyes on NAP
Indications are that some aspects of the revised National Automotive Policy (NAP) will soon make its appearance, ending the long wait for liberalisation of the sector. One government source said phases of the NAP were expected to be announced soon and would include a liberalisation of the segment below 1,800cc, making it more attractive for new players to enter the marketplace. The source said something will be announced soon and would touch on matters that the Government wanted to implement as soon as possible. When asked to comment on this, Minister of International Trade and Industry (Miti) Datuk Seri Mustapa Mohamed said his ministry, which is reviewing the NAP, was in the final stages of streamlining the incentives for energy-efficient vehicles (EEVs).  He added that the Government was talking to a few Japanese automakers to manufacture EEVs locally. According to reports, the Government has put in place strategies under the upcoming revised NAP to turn Malaysia into a regional hub for EEVs. (StarBiz)

Plantation: Malaysian Palm Oil Council CEO says not viable to emulate Indonesia's tax
Malaysia is currently mapping out plans to make its palm oil sector more competitive but it would not mirror that of Indonesia's strategies, which in reality, will result in huge losses for producers. Malaysian Palm Oil Council CEO Tan Sri Dr Yusof Basiron said Malaysia cannot emulate the pratice in Indonesia, where export taxes are collected upfront from producers as it would distort the market. Explaining further, he said the price of fresh fruit bunches (FFB) are calculated less 18% in terms of oil value. As such, he said this enables refiners to produce palm oil at 18% cheaper than market rates as it is already discounted at the FFB level. The mill will then passes the oil to the refineries at another discount of 8%. But, some downstream industries only incur minimal export duty, Yusof said, citing bio-diesel which attracted an export duty of only 2%. Yusof added that not all processed palm oil is exported as some are consumed locally in manufactured goods or oleochemicals. (Business Times)

Telecommunication: MCMC finalising allocation of 2.6GHz spectrum
The Malaysian Communications & Multimedia Commission (MCMC) is finalising its allocation of the 2.6GHz spectrum that will accommodate the shift to fourth generation wireless and long-term evolution networks by Malaysian telecommunication companies. Chairman Datuk Mohamed Sharil Tarmizi said one of the things  they are trying to ensure is sufficient cooperation among service providers in terms of the rollout of the networks. He said they are looking at infrastructure and not service provider consolidation. (StarBiz)