SKPetro

It is spending about US$1.5 billion over the next three years (2012 & Beyond), a move may deemed pivotal to expand the oil and gas support services provider’s geographical presence. The capex to be financed via bank loans will fund the group’s projects involving drilling rigs and pipe laying vessels.

It is using Brazil as its beachhead to venture into West Africa . It had cash of rm2.11 billion as at Jan 31, 2012 versus debt obligations of rm4.5 billion, translating into a net debt of rm2.39 billion.

The company intends to bid for up to rm12 billion worth of projects by end 2012 in Brazil , Australia and Malaysia . Its current order stood at rm13.5 billion, the value of which depletes by some US$1 billion a year.

The company does not have a dividend policy and any proposed payouts will hinge on its capex, cash and debt levels, apart from its retained earnings.

The listing of SKPetro’s listing on Bursa will not raise funds from the issuance of 5 billion new shares as they constituted the payment for the acquisition of businesses in SapCrest and Kencana from shareholders of both firms.

SapCrest and Kencana, whose shares will be delisted, have become wholly owned subsidiaries of SapuraKencana.

The stock price will likely be supported by positive news flow even though the earnings impact from new contracts will likely still be two to three years away.

It is worth noting that SKPetro’s plan to derive cost and revenue synergies from the merger. It has now has a competitive edge in securing larger and more cmplex EPCIC projects both locally and internationally.