20120627 1000 Malaysia Corporate Related News.

Muhibbah Engineering announced that CIMB is withdrawing its support for the proposed restructuring scheme of the Asia Petroleum Hub (APH) project. No further details but management is evaluating various courses of action. Further updates will be announced in due course. (BMSB)

UMW Holdings is investing US$214m (RM684m) to expand its drilling operations with the acquisition of offshore contractor S.D. Standard Drilling's unit and a mobile drilling rig. "The proposed acquisition is in line with the UMW Group's plan to raise revenue and profit contributions from the oil & gas division," it said. The rig is currently being constructed and is expected to be completed and delivered by February 2013. (Starbiz)

SP Setia president and CEO Tan Sri Liew Kee Sin has for the first time exercised the put option granted to him by PNB, a move that sees him reduce his interest in the property development company. According to filings, Liew on Mon transferred 45.19 million SP Setia shares, or a 2.35% stake, to PNB in exercising the put option extended to him under the management agreement dated Jan 20. The 2.35% block was worth RM178.53m based on the transacted price of RM3.95. Following Liew's exercising the option, he now holds a 5.88% stake in SP Setia while PNB and its unit trust funds under management collectively hold about 73.06%. (Financial Daily)

Puncak Niaga 's minority shareholders have urged the board to initiate legal action against Syabas to recoup the outstanding RM1.1bn. Puncak Niaga owns 70% of Syabas while 15% is held by Kumpulan Darul Ehsan and the remaining 15% by Kumpulan Perangsang Selangor. (Star)

The controversial plan by regulator Bank Negara Malaysia (BNM) to set up an Islamic mega bank using public funds could involve the purchase of an existing lender, Asian Finance Bank (AFB), say industry sources. The AFB is one of three foreign Islamic banks in Malaysia. But perhaps likely to be more troubling than the use of public funds is a move to offer Islamic banking expert Professor Datuk Dr Rifaat Ahmed Abdel Karim and other “promoters” of the idea up to nine per cent of the shares in the super bank, which is to be capitalised at US$1bn (RM3.2 bn). “BNM is looking at taking over AFB and turn it into an Islamic mega bank,” a banking industry source told The Malaysian Insider. It is said that Zeti came up with the idea to buy up AFB and turn it into an Islamic mega bank. AFB was incorporated in November 2005 and is backed by a consortium of shareholders — Qatar Islamic Bank (66.67%), RUSD Investment Bank Inc (16.67%), Tadhamon International Islamic Bank (10%) and Financial Assets Bahrain W.L.L (6.67%). It offers syariah-compliant products in consumer, corporate, commercial, treasury, investment banking and asset management services with two branches, one here and the other in Johor Baru. It also has a representative office in Jakarta. (Malaysian Insider)

Malaysia's Genting Group is seeking to increase its stake in Australian casino company Echo Entertainment Group above the 10% threshold, a state regulator said. The New South Wales Independent Liquor and Gaming Authority said it would consider Genting's application. (Starbiz)

The iconic Bukit Bintang Plaza located in the heart of KL and built more than 30 years ago will be demolished to make way for the KVMRT project, mall owner UDA Holdings confirmed. Senior vice-president Syed Ahmad Nazri Syed Kamaruzaman said tenants located outside the front portion of the mall have already been informed to vacate by the end of this month while the rest of the tenants would have to vacate the mall by end of this year. MRT Corp has given the mall operator until year-end to vacate the building.UDA would await a decision from the Finance Ministry on the application by Tradewinds to participate in the Bukit Bintang Plaza building reconstruction. (Star)

The Bank of East Asia (BEA) dispelled speculation that it plans to sell a 23.5% stake in Affin Holdings, a development that pours cold water of suggestions of a possible tie-up between the Armed Forces-backed bank and the Hong Leong group. BEA chairman Sir David Li said that the Hong Kong-based bank in fact hopes to increase its presence in Affin. (Financial Daily)

Tenaga Nasional Berhad who will buy imported gas in two months time is talking to the government on an extra RM1.66bn that will be charged under the market pricing portion of the deal. Tenaga said that Petronas will be able to deliver the volume of gas that is required but any gas amount above 1,100 mmscfd will be priced at the market price while volumes up to 1,100 mmscfd will priced at the government regulated price of RM13.70/mmbtu. Tenaga consumes between 1,200-1,250 mmscfd of gas and the price differential works out to be RM1.66bn. (Star Biz)

Malaysia Airlines (MAS) said the current overall booked load for the first seven A380 flights are encouraging, with departures from Kuala Lumpur registering 89% and London 87% seat factors. “In particular, the first five flights out of Kuala Lumpur are fully booked for First Class. Likewise for three of the seven flights out of London,” the airline said. MAS said the booked Business Class load for the first seven flights in each direction is around 85% from KL and 90% from London. By August this year, with the delivery of the second aircraft, MAS will operate daily A380 flights on the KL-London route. (Financial Daily)

Kalimantan, Sumatra and Papua in Indonesia still offer huge prospects in oil palm ventures both in the upstream and downstream operations for investors but they must carefully mitigate the roadblocks in the Indonesian palm oil industry in order to capitalise on the opportunities. PT Agro Harapan Lestari head of sustainability Edi Suhardi said investors, among others, would encounter lengthy and uncertain process to obtain permits, licences and approvals from relevant government authorities on company incorporation, land ownership and plantation operational licensing. “I believe the lengthy process can be mitigated by acquiring smallholders and local plantation companies or concessions, assuming that the locals have obtained the licences,” he said. (Starbiz)

Diverse issues on palm oil such as limited land supply, labour shortage, biomass utilisation, food security, certification standards, development in Indonesia's oil palm sector as well as Africa as the new frontier in global oil palm cultivation and investment hogged the limelight at the close of the 7th International Planters Conference (IPC 2012). At a panel discussion yesterday, conference participants were told that with the world demand for palm oil expected to continue registering strong growth, the industry players and investors needed to carefully strategise and well-positioned themselves to stay competitive and able to meet with the challenges and threats ahead. A panelist, Kuala Kepong Bhd (KLK) plantation director Roy Lim said given that “money does not grow on trees” in the case of palm oil, the labour shortage in the local plantations must be seriously addressed. While the long-term solution for Malaysia's labour shortage problem in the estates still has yet to be identified, he suggested the Government to open up more sources i.e. countries where foreign labours could be easily obtained. (Starbiz)

Sarawak Oil Palms Bhd (SOP) has commissioned its first refinery and fractionation plant as well as kernal crushing plant in Bintulu. Group executive chairman Tan Sri Ling Chiong Ho said the company had invested RM200m in these facilities. "India and China are the markets for the products from the refinery and the new plant," said Ling. The refinery and fractionation plant have processing capacity of 1,500 tonnes per day. (StarBiz)

Astro has asked banks to submit proposals by Wednesday for mandates to advise on its US$1bn (RM3.2bn) IPO in Kuala Lumpur. Ananda Krishnan, plans to re-list Astro All Asia Networks by end-September in a deal that would give the pay-TV firm a market capitalisation of up to US$4.7bn (RM15bn). (Singapore Business Times)

Beer smuggling is costing the Government RM500m a year in revenue from import and excise duty, according to industry sources. They expect the loss to increase with the illicit trade thriving because of the high demand for smuggled beer which costs between RM6 and RM6.50 less for a 500ml can. In many places it is sold for RM5.50 when it should cost more than RM10. The 320ml can of duty-paid beer costs between RM6 and RM7 at shops in the peninsula. In Sabah and Sarawak, where the smuggling is especially rampant, illicit beer is openly sold in shops in the cities and rural towns for as low as RM10 for three and sometimes even four cans of 320ml. The same price is offered in certain parts of the peninsula, including the Klang Valley. A survey conducted found that retailers in Sabah and Sarawak could not sell their duty-paid beers because of the huger market for the contraband stuff. Retailers interviewed in the two states said they were “forced” to sell smuggled beers because their customers refused to pay a high price for their drinks. (Star)

Censof Holdings Bhd, is eyeing to secure one or two more big government projects this year. Group MD Datuk Samsul Husin said the company had participated in the tender for both projects, and the result would be known by year-end. "They will be sizeable projects like what we had won in the past," he told reporters after the company's AGM. Censof has clinched multiple contracts, including the RM22.5m "Outcome Based Budgeting" project from the Ministry of Finance and Social Security Organisation's social security information management system, worth a total of RM33.5m. Samsul said other than the two big projects, the company is also keen on undertaking smaller contracts to help sustain its financial performance. "We are anticipating growth this year. But whether it is single-digit or double-digit, we do not know yet" he said. (Bernama)

Pelikan International Corp Bhd expects to return to the black in 2013 as it reorganises its structure and divests non-core businesses. Coupled with its move to shut, relocate and merge several of its plants and letting go an estimated 350 employees, Pelikan expects to be on a better footing towards the end of the current financial year. All the measures to be taken would result in cost saving for the group, says Pelikan president Loo Hooi Keat, who spoke to reporters yesterday after the group's AGM. (BT)

TSH Resources Bhd has made a voluntary conditional offer to acquire oil palm planter Pontian United Plantations Bhd (PUP) in a deal worth RM625m. TSH has offered RM90 a share for the 6.94m shares or 80.28% it does not currently hold. The RM90/share purchase consideration will be paid with RM45.06 in cash and RM44.94 via the issuance of 21 TSH shares priced at RM2.14 per share. TSH said the cash portion of the offer will be funded with bank borrowings. (Malaysian Reserve)

Iris Corporation Bhd (ICB) has been appointed by Pahang State Secretary Office (PSK) to be the turnkey contractor for the development of a modern integrated farm in Kampung Sungai Kepong, Lipis, Pahang, for RM23m. The farm, known as the Rimbunan Kaseh Programme, is expected to be completed within 60 days from the delivery of the land by PSK by August. (BT)

Silver Bird Group Bhd plunged into a second quarter pre-tax loss of RM295m because of lower earnings from its consumer food division, and losses from seven dormant subsidiaries. The consumer food division posted revenues of RM31m, 34% yoy lower. The company said the pre-tax loss included adjustment made for the financial irregularities identified in the forensic report.(BT)

SEGi International has entered into a conditional sale and purchase agreement with Bandar Setia Alam Sdn Bhd for the acquisition of a freehold commercial land for RM52.27m. “The group plans to set up, develop and construct a purpose built campus for its proposed international school after taking into consideration the present rising demand for international schools in the Klang Valley.” (Malaysian Reserve)

IGB Corp Bhd is expecting to raise some RM800m in cash from the upcoming listing of its retail real estate investment trust (REIT), which is expected to happen in mid-August. IGB Corp group managing director Robert Tan said the proceeds would be used for future expansion activities, which “are in the pipeline.” Tan also confirmed a recent StarBiz report that said IGB Corp was mulling over another two REITs to unlock the value of its office and hotel assets. “If this (the listing of the retail REIT) goes well, we will look at the possibility of the office/commercial and hotel/hospitality REITs. “It is a question of the timeline or timing. Now, the demand is good for a retail REIT but an office REIT is not the flavour of the month. “Also, the office/commercial and hotel/hospitality REITs would have different investors with different expectations,” he said after the group's EGM. To recap, the listing of IGB's maiden REIT, the retail REIT, in the third quarter of this year is to unlock the value of its two prime retail assets - Mid Valley Megamall and The Gardens Mall. Tan also said IGB Corp was looking at mergers and acquisitions, both locally and abroad. “We are in an opportunistic mode,” he said. Tan also said the group would continue to focus on centrally located city hotels. “We do not want to compete with resort operators. “We will continue to focus on our strength, which is city hotels. “Location is central,” he added. (Starbiz)

Glomac Bhd is looking at mergers and acquisitions (M&A) to help raise its market capitalisation (market cap) to more than RM1bn over the next two to three years. Group managing director and chief executive officer, Datuk FD Iskandar, however, declined to comment if the group was in negotiations with any party. "We can hit RM1bn through M&A or organic growth. The M&A will depend on the business model and it can be with listed companies," said Iskandar. (BT)

Scomi Marine plans to spend US$45m to buy two new vessels to increase the efficiency of its offshore support services division, said President Mukhnizam Mahmud. "We hope these two new vessels can be put into work by year-end," he said. The group recently sold three of its old vessels, putting the number of existing vessels at 11. On profitability, Mukhnizam expects the group to still make profits this year, driven by its current contracts and its coal transportation operations in Indonesia. (Bernama)

Mitsubishi Motors Malaysia (MMM) plans to launch its first fully electric car in Malaysia, the i-Mitsubishi Innovative Electric Vehicle (i-MiEV) by year-end, said CEO Tetsuya Oda. He said, however, the company is now in the final stages of market research to determine the vehicle pricing for Malaysia. (Malaysian Reserve)


United Malayan Land: Upbeat on RM1bn projects
United Malayan Land (UMLand) is upbeat on its plan to launch over 1,500 units of mixed properties with an estimated GDV of about RM1bn this year. Its group CEO Chia Lui Meng said the projects, both township and niche, were mostly located within  Iskandar Malaysia and are expected to enhance the group's earnings for the next two years. He also said that as of May 2012, the group's total sales stood at RM650m with additional RM260munrecognised sales. Lui added that UMLand's recent launches such as the Somerset Puteri Harbour, Johor and Suasana Bukit Ceylon in Kuala Lumpur, have been enjoying excellent take up rates with more than 80% units sold within 4 months. Chia said on average, the group's profit margin stood at 20% to 25% for residential and 30% to 35% for commercial projects.(Business Times)

Scomi Engineering: Monorail project in Brazil to commence next month
Scomi Group's unit, Scomi Engineering, will commence construction of a monorail project in Sao Paolo, Brazil, next month, says Group CEO Shah Hakim Zain. He said the total value for the project is RM2.7bn, of which their portion is RM600m. He said manufacturing activities would be undertaken at a plant located in Palmares and delivery of the first monorail vehicle was scheduled for April next year. The entire project is expected to be completed by 2015. Meanwhile, Shah said the group would continue to invest between RM20m and RM30m annually on research and development. (Bernama)

AmanahRaya REIT: Selling Wisma UEP for RM40m
AmanahRaya REIT is disposing of its Wisma UEP building to Tenaga Nasional for RM40m. It said the proposed disposal was in line with its plan to streamline its portfolio. It said there is limited upside potential growth to Wisma UEP, with occupancy of less than 50% since September 2011. (Bernama)

Naim Indah Corp: Not taking legal action over termination of agreement
An official from Naim Indah Corp (Nicorp) who declined to be named said the company does not intend to take legal action over the termination of the letter of invitation from Aspire Rich Sdn Bhd to participate in the liquefied petroleum gas (LPG) business. Nicorp had said in an earlier announcement that it would seek legal advice in relation to the letter of invitation issued by Aspire Rich Sdn Bhd. (Financial Daily)

PFCE: Sees good prospects in oil & gas industry following RTO exercise
PFCE (formerly known as APP Industries) hopes to be able to be profitable next year after the completion of a reverse takeover (RTO) exercise this year, which is expected to transform PFCE into one of the leading players in the oil and gas industry. The RTO will involve the injection of PFC Engineering Sdn Bhd, a locally established Bumiputera group of companies offering integrated engineering services for the oil and gas industry into PFCE. (Bernama)

Goh Ban Huat: Intends to develop land in Segambut
Goh Ban Huat (GHB) plans to venture into property development within the next 3 to 5 years. The company has 5.92ha of prime land located in Jalan Segambut, Kuala Lumpur, on which its manufacturing plant is built.GBH director Thor Poh Seng said the company  is currently doing some conceptual planning. However, he said the management feel that there is an oversupply of condominiums in Segambut and Mont Kiara. As such, he said the company will time its property development plans appropriately. (Financial Daily)

Telecommunication: Fight for cellular subscribers for home services will get tough
Experts said the fight  among cellular companies for subscribers in home services segment will only get tough when Maxis Bhd and Celcom Axiata Bhd are able to offer a complete products and that may take some time. Till then, they said Telekom Malaysia (TM) would continue to dominate the market. However, Maxis recently tested the ground by slashing its rates to RM118 a month for its 10Mbps offering (part of the home services package) and is said to have got “encouraging response.  The number of new adds is something Maxis is not willing to share but those in the know claim that Maxis' move to slash rates to below what TM is offering certainly had irked the incumbent, more so since Maxis is riding on TM's highspeed broadband (HSBB) network to offer the services. (StarBiz)


SOP: Commissions refinery and fractionation plant. Sarawak Oil Palms Bhd (SOP), which has ventured downstream in palm oil processing, has just commissioned its first refinery and fractionation plant as well as kernel crushing plant in Bintulu. Its fifth palm oil mill with a capacity of 60t/hr in Kemena, Bintulu would be operational by July 2012. The sixth palm oil mill in Baram, Miri is expected to be operational by the second half of 2013. (Source: The Star)

Affin: BEA stake not for sale. The Bank of East Asia (BEA) dispelled speculation that it plans to sell its 23.5% stake in Affin Holdings Bhd. BEA considers its shareholding in Affin a strategic investment and, in fact, plans to increase its interest to 25%.(Source: The Edge Financial Daily)