20120827 1025 Malaysia Corporate Related News.

OSK Holdings, RHB Capital: Merger to be completed by 1Q 2013
The marriage between OSK Holdings’ investment banking arm with RHB Capital is expected to be completed by the end of 1Q 2013. OSK director Tan Sri Ong Leong Huat said on Friday that approvals were still needed from Indonesia, Hong Kong and Singapore jurisdictions. Meanwhile, approvals from Malaysia, Cambodia and Thailand had already been received. Besides, Ong said the group would continue to pay dividends. He added that if there are no major commitments in the future, they can pay 60% to 70% of the profits as dividends. He added that the group could afford to be more generous in dividend payments as it did not have to keep a lot of profits for reserves or capital requirement. (StarBiz)

IJM Plantations: New bumper harvest unlikely
IJM Plantations may be unable to better last financial year's record-breaking performance due to lower production and CPO prices. IJM Plantation CEO and MD Joseph Tek Choon Yee said the company is unlikely to match the strong performance this time around. He said last year was a bumper harvest year. As such, according to him, fresh fruit bunches (FFB) production will not be as strong this year because of biological resting of palms and a lagged El Nino affect. Nonetheless, the company said additional crops can be expected from new plantings in Indonesia that will be coming into maturity. (Business Times)

Scomi Group: Seen as front runner
Scomi Group is believed to be the front runner for two risk-service contracts (RSCs) to be awarded by Petronas for the Tembikai and Cenang marginal fields off Peninsular Malaysia. Sources said besides Scomi Group, the other bidders for the contracts included Bumi Armada Bhd, Daya Materials Bhd and Sydney-based AWE Ltd. A source said Petronas was close to announcing the winners for these two fields with contracts valued at between US$200m (RM620m) to US$400m (RM1.2bn) each. Scomi Group, in the midst of a restructuring exercise, is said to be partnering another Australian company, Cue Energy Resources Ltd, for this bid. (StarBiz)

Yinson Holdings: To invest RM47m in Vietnam port operations
Yinson Holdings will invest US$15m (RM46.5m) to build warehouse facilities at Vietnam's PTSC Phu My Port in 3Q 2013. Chairman and MD Lim Han Weng said with the new facilities, the company would be in a better position to strengthen itself in the related port and logistic activities there. Lim said the company was currently talking with several Vietnamese animal feed importers who had shown strong interest to lease the warehouse facilities. He said the new warehouse facilities would also make PTSC Phu My Port the preferred port in Vietnam. (StarBiz)

P.I.E. Industrials: Banks on its e-commerce business solutions
P.I.E. Industrial expects the e-commerce business solutions sector to grow its business and to cushion against a softening global market for the group's industrial electronic products. Group MD Alvin Mui said the group was now exploring to develop a new generation of ecommerce platform solutions that could support a more comprehensive range of business transactions. He said the increasing use of smart mobile devices is driving the popularity of ecommerce solutions supported by cloud-computing. (StarBiz)

Integrax: Confident of collaboration with Vale
Executive director Azman Shah Mohd Yusof said Integrax is still in talks with Brazillian miner Vale SA for a potential collaboration. He said it is inevitable that the two parties would have to work together as their facilities are located in the same area. Azman said some of the collaborations explored involve Vale’s iron ore distribution centre and common infrastructure in Perak. (Financial Daily)

Golden Plus: Says unable to release 2Q FY2012 results by end-August
Golden Plus is unable to release its financial results for the second quarter ending June 30 by the end of August as per Bursa Malaysia ruling as it is still in the process of finalising the audited financial statements for FY2010 and preparing the financial statements for FY2011 for auditing. It told Bursa Malaysia it was expecting to issue and submit its outstanding financial statements within two months after the release of the audited financial statements for FY2011 which was still outstanding for release to Bursa Securities. (StarBiz)

Automotive: Used car dealers the worst hit?
Industry players are hoping the reportedly gradual car price reduction in the upcoming National Automotive Policy will be of minimum impact to the current automotive industry, in particular the used car sector. “These are all hearsay right now, but the impact on the industry would be extensive if this turns out to be true. Details need to be known before we can project anything. Right now we can only assume,” said a reputable industry source who declined to be named. He said the used car sector would  bear the brunt of the move as cheaper new cars would impact the resale value of second-hand cars, and used car dealers would have to shoulder the burden of squeezed margins and even losses should new car prices drastically affect the value of existing stocks. (StarBiz)

Banking: 6 banks to fund RM1.87bn ferro-alloy plant in Bintulu park
Six banks, including Malaysian ones, have to date indicated their participation to fund OM Materials (Sarawak) Sdn Bhd's (OM Sarawak) US$592m (RM1.87bn) ferro-alloy smelting project in Samalaju Industrial Park in Bintulu. Standard Chartered Bank (Stanchart), Chinese and international banks are among the banks. Stanchart is the smelting project's financial advisor. A detailed memorandum on the project prepared by Stanchart and OM Holdings Ltd (OMH), which has a 80% stake in the JV project with Cahya Mata Sarawak Bhd (CMSB), was dispatched to prospective lenders early last month. (StarBiz)

Property: Demand for industrial properties on the rise in Iskandar Malaysia
Demand for industrial properties in Johor is likely to remain positive based on the state's position as one of the top investment destinations in the country. Iskandar Regional Development Authority (IRDA)  CEO Datuk Ismail Ibrahim said the current situation would create demand for industrial properties especially in Iskandar Malaysia. Ismail said Johor was still strong in the manufacturing sector and remained one of the top three destinations for foreign direct investments (FDI) in Malaysia. Statistics from the Malaysian Industrial Development Authority showed that it had approved 929 manufacturing-related activities for Johor from 2007 until April this year with RM41.48bn in investment. Of the figure, RM14.99bn (14.4%) came from the domestic investors and RM26.49bn (15.3%) from foreign investors. (StarBiz)

Plantation: Sabah palm oil refiners to impose bigger discount
Sabah's palm oil refiners will impose a higher discount to buy cheaper crude palm oil (CPO) beginning next month, a move likely to impact revenues of millers as well as planters in the state. IJM Plantation CEO and MD Joseph Tek Choon Yee said refiners in Sabah want to more than double the existing discount of RM40 per tonne of CPO it gets from millers. Tek said beginning September 2012, Sabah refiners will be increasing the discount from RM40 a tonne of CPO to between RM80 and RM100 a tonne. It is learnt that Sabah's discounts of RM40 a tonne was a business agreement from before, when oil from there had to be shipped to refineries in Peninsular Malaysia. (Business Times)

Utilities: 1MDB may drop one bid for Prai CCGT
The proposed acquisition of power outfit Mastika Lagenda Sdn Bhd by 1Malaysia Development Bhd (1MDB) may see the former pull out of the bid for the 1,000MW to 1,400MW Prai Combined Cycle Gas Turbine (CCGT) project, say power industry executives. That’s because the proposed acquisition will effectively mean that 1MDB will have two units bidding for the Prai power project, which contravenes the Energy Commission’s guidelines for the pre-qualification process, whereby each group is only allowed one submission. 1MDB’s unit Pendekar Power Sdn Bhd is among the six short-listed bidders, as is Mastika Lagenda, which controls 75% of Genting Sanyen (M) Sdn Bhd. (The Edge Weekly)

TH Heavy gets international offers for its FPSO vessel
TH Heavy Engineering has received several offers of up to USD130m (RM93m) from several international private companies to acquired its floating, storage and offloading (FPSO) vessel. It has also received similar offers from local companies. Sources said TH Heavy stood to make an extraordinary gain of at least USD30m if it decides to sell its FPSO vessel. TH Heavy’s initial investment for the FPSO stood at USD82.5m. (Malaysian Reserve)

Bonia’s chairman to raise stake in Bonia
Bonia Corp’s group executive chairman cum CEO, Chiang Sang Sem, is in discussions with several parties to increase his stake in Bonia. The indicative price for the potential acquisition is in the range of RM1.80 to RM2.00 per share. It said the acquisition, when completed, would result in Chiang and his family collectively holding more than 50% in the company. (Malaysian Reserve) Please see accompanying report

QL Resources to set aside RM200m for capex
QL Resources will allocate RM200m for capex for the current financial year ended 31 March 2013 to fuel domestic and regional expansion, MD Chia Song Kun said on Friday. He said the capex was important to place the company on track to achieve a double-digit growth in revenue and profit for the current year. (BT)

Magna Prima plans RM1bn jobs
Magna Prima has lined up several new launches in KL and Selangor with projected gross development value (GDV) of more than RM1bn. First out of the blocks will be Phase II of a residential tower at the Boulevard Business Park in Jln Kuching, KL. Magna Prima CEO Datuk Rahadian Mahmud Mohammad Khalil said the project will see the construction of 330 units of serviced apartments with a GDV of RM220m. (BT)


The planned RM1bn investment by DRB-Hicom to accelerate the development of Proton City in Tanjung Malim over the next five years may be a move to consolidate Proton's manufacturing activities in a single location. Proton's manufacturing land bank of 250 acres in Shah Alam could have a GDV of more than RM1bn. (Star Biz)

Former MRCB CEO Datuk Mohamed Razeek Hussain is said to be on the verge of taking on a senior role in DRB-Hicom.  Sources say it is unclear the exact role Mohamed Razeek will play at DRB-Hicom, but it is understood that it will not be any "small role", possibly heading its property division. (Malaysian Reserve)

Sabah's palm oil refiners will impose a higher discount to buy cheaper crude palm oil (CPO) beginning next month, a move likely to impact revenues of millers as well as planters in the state.  IJM Plantation Bhd  chief executive officer and managing director Joseph Tek Choon Yee said refiners in Sabah want to more than double the existing discount of RM40 per tonne of CPO it gets from millers. "This higher discount is introduced by the refiners and will mean millers get lower sales proceeds. It will eventually cascade down to the planters as well," Tek said. He said that in such a monopolistic situation the millers have no choice but to accept the "forced" discount. The new discount to be imposed would translate to a loss of RM8 to RM12 a tonne of fresh fruit bunches effective next month. (BT)

Plantation players continue to call for incentives to enable further growth in the sector hoping that this year's budget will highlight some of the sector's recommendations. Malaysian Rubber Board director general Datuk Salmiah Ahmad said that any initiative or incentive for labour concerns in the rubber plantation would be favourable. "One of the most import parameters that is of concern to the industry currently is labour in regards to the ease of getting foreign labour and the cost of getting the labour," she said. United Plantations Bhd executive director  Datuk Carl Bek-Nielsen appealed to the Government to reintroduce the reinvestment allowance for plantation companies. Felda Global Ventures Holdings Bhd president and chief executive officer Datuk Sabri Ahmad added that the Government should look into giving incentives for various operations under the sector, such as grants or tax incentives for speciality oleo derivatives. (StarBiz)

Pestech Sdn Bhd (PSB), a subsidiary of Pestech International Bhd, expects the construction of a 275kv substation for OM Materials (Sarawak) Sdn Bhd's ferro alloy smelting plant project to be completed by December 2013. The project near Bintulu, Sarawak, is worth US$36.1m. Work on the 16 -month project commenced last Friday with PSB having taken possession of the site following the signing of the letter of award in Singapore. (Malaysian Reserve)

The listing of Westports Malaysia, the concession holder of the Westports terminal in Port Klang, is far from being finalised, said a source. The company had received proposals from bankers over the last three to four years. Much has been reported about Westport planning to raise as much as US$1bn in a listing exercise to take place next year. Westports is jointly owned by companies linked to  Tan Sri G. Gnanalingam and Li Ka Shing. Wesports is expected to handle 7m teus this year compared to 6.4m teus in 2011. It has been recording a growth of 20% in teus over the last five years. Westports holds the concession to operate the Westports terminal up to 2054. Hutchison Port Holdings bought a 30% stake in the company in 2000. (Star Biz)