Thursday, August 29, 2013

IJM Corp - proposed disposal of stakes in its ports

Its proposed disposal of stakes in its ports in Kuantan and Kemaman is part of its plan to unlock the value of its concession assets.

It is a straight listing of its assets or an IPO as a business trust. It may also look at selling stakes to private equity firms or strategic investors without providing a time frame.

IJM’s long term plan to list its profitable assets in Malaysia, which will serve as a catalyst for growth.

IJM sold its 36% stake in the Trichy Tollway in India for a profit of about rm50 million in March 2013 and disposed 40% of its equity stake in Kuantan Port to China ’s Guangxi Beibu Gulf Intl Port Group.

The infra business contributed to about 105 of total revenue in the last financial year ended March 31 2013. It agreed to become the biggest shareholder in oil and gas services provider Scomi Group Bhd adding to its portfolio of plantations and property assets.

About 75% of its debt is in concession assets, which is non recourse. Total debt was at rm2.86 billion.

IJM will see most of its earnings growth coming from property segment in the near term or strong sales and demand. The company may later list the commercial property element of the project as a REIT.

IJM will continue to focus on boosting palm oil production by improving yields.

Assuming the group decides to list its 30% of its highway assets, it will reap between rm660 million and rm1.1 billion in a one off profit.

The company had rm5 billion in short and long term debts as at FY2013, 75% of which were non recourse debts, backed by its concessions.

IJM holds stakes in WCE (20%) and 22% (KEURO), which holds the other 80% stake in Banting-Taiping highway concession. IJM’s effective stake in the project is 39.1%.

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Please note that all data given are merely blogger's opinion. It is strongly recommended that you do your own analysis and research before investing.