The Edge Sunday, 20 February 2011 16:00
by Max Koh
Ramunia Holdings Bhd is in talks with oil and gas outfit Coral Alliance Sdn Bhd — believed to be linked to Tengku Datuk Ibrahim Petra and Robert Lee, former directors of Petra Energy Bhd — for a possible synergistic tie-up or even an acquisition of the latter.
“We are in talks with Coral Alliance at the moment, but it is too early to say what will come out of it. We definitely see a synergistic value between its hook-up and topside maintenance business and our oil rig fabrication activities,” says Ramunia group CEO Nor Badli Munawir Mohamad Alias Lafti.
Nor Badli declined to comment on whether the talks would end up with Ramunia entering into a joint venture with Coral Alliance or acquiring it.
According to the Companies Commission of Malaysia (CCM), Coral Alliance’s shareholders include Wan Abdillah Wan Hamid, Diana Tony Ngau and Tan Chin Shen. The company posted a profit after tax of RM1.6 million for FY2009 ended Dec 31 on the back of RM25.26 million in revenue.
Ibrahim and Lee are not named in the CCM filing as having interests in Coral Alliance, but both are believed to be linked to the company through certain shareholders, according to industry sources.
The duo had resigned as chairman and executive director respectively of Petra Energy last year following a boardroom tussle. Still, there is a possibility that they could step into the corporate limelight again if Ramunia acquires Coral Alliance through the issuance of shares, say industry sources.
In any case, a joint venture or an acquisition of Coral Alliance by Ramunia will benefit the latter as Coral Alliance is said to be the frontrunner for a hook-up and topside maintenance contract from Petronas.
Ramunia has been on the lookout for an acquisition since it disposed of its main asset last April and was left without a core business. The company had sold its fabrication yard in Teluk Ramunia, Johor, to Sime Darby Engineering Sdn Bhd for RM515 million to repay its debts.
With the completion of the disposal and repayment of debts, Ramunia soon found itself in a net cash position to acquire a new core business. As at Oct 31, 2010, the company’s cash and bank balances stood at RM27.8 million with no borrowings. It also has short-term deposits with licensed banks amounting to RM103.75 million.
Last month, Ramunia proposed to acquire a fabrication yard in Pulau Indah from Oilfab Sdn Bhd for RM83.8 million. The deal will be settled via RM3.8 million cash and an issuance of 156.86 million shares worth RM80 million. The transaction could see Oilfab emerge as a substantial shareholder of Ramunia with a 9.57% stake, says Nor Badli.
Ramunia has also signed a contract with Pleasant Engineering Sdn Bhd to utilise the latter’s fabrication yard in Sandakan, Sabah. It also confirmed that it is in talks to acquire parts of Syarikat Borcos Shipping Sdn Bhd.
“We are indeed in talks with Syarikat Borcos, but we are looking at acquiring the marine division and possibly its fabrication yard in Indonesia instead of the whole company. We have been talking for the past two months and hope to wrap up negotiations as soon as possible,” says Nor Badli.
The deal is said to be likely to happen as Lembaga Tabung Haji (LTH) is a controlling shareholder in both Borcos and Ramunia. The pilgrims’ fund holds 84% equity interest in Borcos Shipping and a 25.17% stake in Ramunia.
With Ibrahim said to be close to LTH, market talk is that an accord between Coral Alliance and Ramunia could be reached soon. It is worth noting that Datuk Azizul Rahman Abdul Samad, a substantial shareholder of Ramunia, has pared down his indirect stake to 11.06% as at last Thursday, from 14.28% as at Dec 30, 2010. This raises speculation that Ibrahim might acquire a small stake in Ramunia or LTH migth raise its holdings in the company.
Ramunia’s clean balance sheet and its plans to re-enter the fabrication yard business certainly looks attractive to potential investors.
“Now that we have paid off our debts and have a surplus from the disposal, we are looking at acquiring businesses, especially at a time when the market is booming,” says Nor Badli.
He adds that Ramunia is targeting to secure RM300 million worth of fabrication contracts from Petronas, to be completed over the next 18 to 24 months.
“We expect the Pleasant Engineering yard in Sandakan to be ready in three to six months once Petronas has audited the yard and begins to secure jobs soon. In the meantime, the Pulau Indah yard should be ready to execute orders once we get the keys [to the fabrication yard] next month,” says Nor Badli.
He also says Ramunia should be able to maintain its bottom line for FY2011 at about RM68 million. “At any time we should be able to produce 15,000 tonnes of steel works. In the long term, we are looking at 70% contribution from fabrication, while 30% will come from topside maintenance and de-commissioning works.”
For FY2010 ended Oct 31, Ramunia posted a net profit of RM65.78 million on the back of RM34.86 million in sales. For FY2009, Ramunia suffered a net loss of RM52.72 million on RM296.97 million in revenue. Its share price has risen 76.2% in the last three months, closing at 67 sen last Friday.
This article appeared in Corporate page of The Edge Malaysia, Issue 846, Feb 21-27, 2011
Tiada ulasan:
Catat Ulasan