20101011 0932 Malaysia Corporate Related News.

US stocks fall on earnings; Alcoa weighs on Dow
US stocks fell sharply on Wednesday, with the S&P 500 Index ending lower for a fourth consecutive trading session, after aluminum producer Alcoa Inc cut its global demand outlook and Chevron Corp warned of lower earnings. The S&P 500 declined 8.92 points or 0.6% to close at 1,432.56, with energy as the greatest laggard and financials the best performer of its major industry groups. The Dow Jones Industrial Average fell 128.56 points, or 1%, to close at 13,344.97, dropping for a third trading session. (Market Watch)

Berjaya buys 60% in Algaetech
Berjaya Corp (BCorp)’s wholly-owned subsidiary, Berjaya Group, has acquired a 60% stake in Algaetech International SB, comprising 900,000 shares, from LM Greentech SB for RM1m cash. BCorp said that after the acquisition, it would advance RM300,000 on a quarterly basis over a year to Algaetech for working capital. “The acquisition allows BCorp to invest in green technology and bio-technology projects with potential applications in health products, environmental management and renewable energy,” it said in a filing with Bursa Malaysia yesterday. (Financial Daily)

Fernandes to raise RM1bn via IPOs
Tan Sri Tony Fernandes is planning a back-to-back listing of his privately-held entities – Tune Insurance Malaysia and AirAsia X SB – with IPOs that will raise at least RM1bn early next year. Financial executives familiar with the plans said the Tune Group, controlled by Fernandes and his partner Datuk Kamarudin Meranun, had submitted an application for the listing of Tune Insurance in end-Sept. Meanwhile, the submission for AirAsia X’s IPO application was planned for as early as this week. (Financial Daily)

Malton-Batu Kawan JV for RM3.8bn project
Malton has entered into a joint venture with Batu Kawan Development SB for a proposed joint development of 300 acres in Batu Kawan, Penang, with an estimated gross development value (GDV) of RM3.8bn. “The JV is in line with the company’s expansion of its core business arms of property development and construction, and is expected to contribute to the medium and long-term profitability of Malton and its subsidiaries,” Malton said. (BT)

Green light for CPO export tax cut
The Cabinet has agreed to lower the crude palm oil (CPO) export tax from the current 23% as a means to stem falling palm oil prices, the Plantation Industry and Commodities Minister Tan Sri Bernard Dompok said. CPO prices had been on a downtrend for months but suddenly plunged three weeks ago. On 2 Oct, palm oil posted its biggest loss in nearly three years, tumbling 9% to RM2,255 per tonne - its steepest daily drop since the 2008 financial crisis. However, since news reports of a possible cut in CPO tax surfaced a week ago, palm oil prices have risen and begun to stabilize at around RM2,400 per tonne. (BT)

Johore Tin rectifies rights, warrants prices
Johore Tin yesterday clarified that the company has resolved the price issue concerning its planned renounceable rights issue of 23.3m new shares together with detachable warrants of the exact amount, on the basis of one-for-three. In an exchange filing, Johore Tin said the issue price of the rights shares has been fixed at RM1.28 each, representing a discount of approximately 31.6% to the theoretical ex-rights price of RM1.87 per share, calculated based on the five-day volume weighted average market price up to and including 9 Oct 2012, of RM2.07. The exercise price of the warrants has been fixed at RM2.28 each and has a tenure of five years. (Malaysian Reserve)

ING Agrees to Sell Malaysia Unit to AIA Group (Bloomberg)
AIA Group Ltd. (1299), the third-largest Asia-based insurer, agreed to buy ING Groep NV (INGA)’s insurance business in Malaysia for about 1.3 billion euros ($1.7 billion). The purchase will boost the percentage of profit AIA gets from Malaysia to 13 percent from 8 percent, it said in a statement. Separately, AIA said its value of new business rose 22 percent in the third quarter to a record $300 million. AIA Chief Executive Officer Mark Tucker has sought to revive new business growth after the Hong Kong-based insurer was hurt during the financial crisis because of woes at its bailed- out former parent American International Group Inc. (AIG) Tucker today said the strength of AIA’s balance sheet means it can grow its existing business as well as buy new assets. “It’s a terrific asset and I think very complementary to our own,” Tucker said in an interview with Bloomberg TV. “We can always look at growing the business organically and if there are compelling acquisitions then we will look at them.”
The purchase includes ING’s life-insurance and employee- benefits businesses in Malaysia, as well as its 60 percent stake in ING Public Takaful Ehsan Berhad. The deal values the operations at 16.9 times 2011 earnings and 2.2 times book value in the first half of 2012, ING said. The transaction, which may be completed in the first quarter, is expected to lead to a gain of about 780 million euros, Amsterdam-based ING said. AIA fell 1 percent at yesterday’s close in Hong Kong, crimping this year’s gains to 22 percent. ING lost 0.2 percent to 6.38 euros in Amsterdam.

Automotive: Special Perodua package for undergrads. Perusahaan Otomobil Kedua Sdn Bhd (Perodua) has offered a "cheap" package for students at higher learning institutions to own a Perodua car. They can buy a Perodua car by paying a monthly instalment of as low as MYR299, with no downpayment. (Source: Business Times)


AirAsia expects to complete its negotiations with Airbus to buy an additional 100 A320 aircraft for the airline's expansion in a month's time, said  Tan Sri Tony Fernandes. "100 should be enough but we will supplement it with aircraft leases. We also need to take more of the A320 Neos aircraft," he said.(Star Biz)

The government will bear the holding cost for the rubber industry if exporters need to stop selling, in a move to support the price of SMR 20. Minister of Plantation Industries and Commodities, Tan Sri Bernard Dompok said the price mechanism would kick in should the tyre-grade SMR20 fall below US$2.70 (RM8.31 as at midday) per kg. "The tripartite agreement between Thailand, Indonesia and Malaysia would cut off 300,000 tonnes to the market, and the portion that Malaysia would take is at 39,000 tonnes in proportion with the rubber we produced," he said. The three countries had agreed in August to cut down rubber trees and trim exports by 300,000 tonnes, or about 3% of global production this year in an attempt to curb declining global rubber prices. The move came into effect on Oct 1. (StarBiz)

Brahim's Holdings says the catering agreement between its unit  LSG Sky Chefs-Brahim's Sdn Bhd (LSGB) and Malaysian Airline System (MAS) remains intact. It said any operational issues will be reviewed and resolved progressively within the framework of the existing catering agreement. "Upon discussions with the representatives of MAS, Brahim's is pleased to inform that there are no substantial issues at the shareholders' level with MAS in respect of the catering agreement," it said. Brahim's  said that LSGB is committed to continue supporting MAS' efforts to enhance its branding and improve its service delivery platform. The company will reconvene its extraordinary general meeting to relay the clarification with MAS to its shareholders. (BT)

The retail chain industry is expected to achieve growth of 5% this year and 5.5% next year, said  Malaysian Retailer-Chains Association (MRCA) president Datuk Nelson Kwok. "Retailers consist of many types of businesses. Thus, some saw growth while others saw a drop in sales during the last quarter," he said. "Having said that, our members are prepared to face the challenges ahead. Some are moving overseas to expand and counter the slowdown in domestic businesses. Locally, retailers are coming up with ways and means to increase their sales and bottomline," he added. The coming months will be better. "The budget (2013) is already out and some funds have been put back into the market. We hope this will stimulate business activities in the domestic market," Kwok said. Its vice-president Valerie Choo said the last two quarters were slow due to subdued consumer sentiment with many consumers adopting a "wait and see" attitude, especially for big ticket purchases in anticipation of the 13th general election. "But we're confident that the fourth quarter (of 2012) will be good because of the festive seasons and school holidays. I believe we'll be able to catch up and maintain a 5% retail sales growth projected for the full year," she said. She said for 2013, it is cautiously optimistic driven by funds pumped by the government and mega projects introduced this year. "This will translate into more money in the system and more consumer spending. 2013 will be slightly better at 5.5% growth," she added. (Sun)

The Forest Research Institute Malaysia (FRIM) launched Malaysia's first carbon offset conservation programme with the collaboration and sponsorship from Bumi Armada. The project involves the conservation of carbon stored at Field 11, a 5.6ha of rich, biologically diverse forest site within FRIM's 544ha campus in Kepong. Field 11 has the capacity to store 3,938.6 tonnes of carbon equivalent annually and Bumi Armada's contribution of RM107,000 will cover the carbon credits from the conservation of the forest within the project site for a period of five years. (BT)

The share price of Asia Media was among the biggest losers yesterday when it shed 28%, prompting a query for unusual market activity (UMWA) from Bursa Malaysia. In its reply to the stock exchange, Amedia said it was unaware of any development which could have contributed to the UMA save for its previous announcements pertaining to a proposed transfer of its listing to the main board and a proposed bonus issue and free warrants issue. (Star Biz)

RAM Rating Services has reaffirmed the long-term rating of AA3 for Mukah Power Generation Sdn Bhd's senior Sukuk Mudharabah programme of up to RM665m (2006/2021) with a stable outlook. Mukah Power is an independent power producer incorporated to construct, own, operate and maintain a 270-MW coal-fired power plant in Mukah, Sarawak, under a 25-year power purchase agreement (PPA) with Syarikat SESCO Bhd. (StarBiz)

Tenaga Nasional: Malaysia-Indonesia companies to supply coal to Malaysia
Aditia1Energy Sdn Bhd, a potential coal supplier to TNB Fuel Services Sdn Bhd (TNBF), which is a wholly-owned subsidiary of Tenaga Nasional Bhd (TNB), Wednesday signed a Memorandum of Understanding (MoU) with Southdale Resources Sdn Bhd and PT Exploitasi Energi Indonesia Tbk, for the supply, delivery and sale of coal to Malaysia. Executive Director of Aditia1Energy, Datuk Ahmad Mukriz said the  3 companies planned to forge a close and active relationship to supply, deliver and sell up to 3m metric tonnes of the commodity to TNBF each year for the purpose of generating electricity. (Bernama)

Berjaya Corporation: Buys 60% of Algaetech
Berjaya Corporation Bhd's wholly-owned subsidiary, Berjaya Group Bhd, has acquired 60% stake in Algaetech International Sdn Bhd, comprising 900,000 shares, from LM Greentech Sdn Bhd for RM1m cash. Berjaya Corporation said following the acquisition, Algaetech will be a 60%-owned subsidiary of the company and Berjaya Corp will advance a sum of RM300,000 on quarterly basis for a year to Algaetech for working capital. It said the acquisition allows the company to invest in green technology and bio-technology projects with potential applications in health products, environmental management and renewable energy. (Business Times)

Malton: Legal tussle for Pusat Bandar Damansara buildings
A court case has started involving companies believed to be linked to property group Malton Bhd and Johor Corp (Jcorp)  concerning an old agreement to sell the prized Pusat Bandar Damansara (PBD) buildings. The case is drawing some level of interest because the parties involved are significant corporations and the fact that PBD is an inconic building in the Klang Valley. Top lawyers are also representing the respective parties. Tan Sri Cecil Abraham is part of the team fighting for the companies linked to Malton while Tommy Thomas is representing the parties linked to JCorp. In essence, the case involves 2 units linked to Malton, which has initiated action against JCorp over a piece of land that the latter was supposed to have sold some years ago. They are now demanding that JCorp hand over the land and buildings worth RM700m. (StarBiz)

UAC Bhd: Privatisation by Boustead Holdings approved
Boustead Holdings has received overwhelming approval from UAC’s shareholders for its proposal to take the company private. At UAC’s EGM on Wednesday, shareholders approved Boustead’s selective capital reduction and repayment exercise, along with UAC’s proposed dividend. (Financial Daily)

Harrisons Holdings: Customs Department rejects request for extension over RM91.7m due The Customs Department has rejected Harrisons Holdings unit's request for an extension of 3 weeks over payment for RM91.75m. Harrisons said on Wednesday its unit Harrisons Trading (Sabah) Sdn Bhd (HTSB) had on Monday received a letter from the Customs Department rejecting HTSB's request. It said the Customs Department has advised HTSB to settle the amount demanded (RM91.75mil) on an urgent basis. However, it said the board was seeking legal advice on HTSB's options and response to Customs' latest letter as HTSB was not liable to pay as previously announced. (StarBiz)

Golsta Synergy: Mulls selling non-profitable overseas business
Golsta Synergy plans to sell its non-profitable overseas businesses in Indonesia and China, it said in a reply to a Bursa Malaysia Securities on Wednesday. The company, which was queried over the recent surge in the share price, said the board had held preliminary discussion on the proposed sale of these businesses. They included cultivation of oil palm seeds and seedlings in Indonesia and rubber processing and trading of rubber related products in China. It said the details of the proposal have not been finalised and is yet to be approved by the board. Golsta closed 5.5 sen higher at RM1.01. There were 789,200 shares done at prices  ranging from 97 sen to RM1.12. The company said its major shareholder Messrs GS Capital Sdn Bhd, had on Sept 25, disposed 6.09m shares to public investors. (StarBiz)

Glove: Government to bear holding cost for rubber industry
The government will bear the holding cost for the rubber industry if exporters need to stop selling, in a move to support the price of SMR 20. Minister of Plantation Industries and Commodities, Tan Sri Bernard Dompok said on Wednesday the price mechanism would kick in should the tyre-grade SMR20 fall below US$2.70 (RM8.31 as at midday) per kg. He said the tripartite agreement between Thailand, Indonesia and Malaysia would cut off 300,000 tonnes to the market, and the portion that Malaysia would take is at 39,000 tonnes in proportion with the rubber we produced. The three countries had agreed in August to cut down rubber trees and trim exports by 300,000 tonnes, or about 3% of global production this year in an attempt to curb declining global rubber prices. (StarBiz)

Plantation: Malaysia can have B5 biodiesel nationwide by Dec to cut CPO stocks
Malaysia is ready to have nationwide implementation of the B5 biodiesel by year-end and have allocated the funds to do so, said Plantation, Industries and Commodities minister Tan Sri Bernard Dompok on Wednesday. He said the government has allocated the funds for the building of blending facilities. In Malaysia, B5 biofuel is a blend of 5% palm methyl ester and 95% regular diesel. A speedier nationwide implementation of the B5 biodiesel programme could help speed-up the take-up of oil palm in the country. Some RM42m has reportedly been set aside to fund in-line blending facilities at 6 petroleum depots with another RM200m earmarked to set-up blending facilities nationwide. (Business Times)