Sunday, May 26, 2013

Scomi Group

In Feb 2013 it was reported that it is tipped to win a rm2.3 billion contract for the provision of drilling fluids. It is believed that Petronas has picked Scomi over a few intl names to get the lion’s share of the five year drilling fluid contracts available under the Pan Malaysia mega cluster.

Meanwhile Comic is also believed to have been successful in its bid for a job offered by independent oil producer Dragon Oil in Turkmenistan worth US$40 million is also for the provision of drilling fluids.

IJM Corp is now the second largest shareholder in Scomi after Kaspadu Sdn Bhd, a private entity owned by Shah Hakim and two other parties this is firmly in control of the company.

Meanwhile Scomi Group received full support to dispose its subsidiary, Scomi Oilfield Ltd to Scomi Marine Bhd.

Scomi Group has proposed to dispose its entire interest of 76.08% stake in SOL to SMB for a total consideration of rm766 million. It will be satisfied by 1.22 billion new ordinary shares of 45 sen each in SMB totaling to rm575.26 million. The remainder consist of SOL’s receivables to be assumed by SMB.

This reorganization exercise will put the company in a better position to raise funds when necessary.

Post reorganization, the group’s gearing will decrease to 1.21 times as compared to 2.09 times as at Dec 31 2011.

The group is constantly looking out for new investment opportunities and will take a closer look at them after the reorganization is completed.

Its current (May 2013) order book has surpassed RM5 billion with the latest contract worth RM98.5 million in Turkmenistan.

Scomi Group - which underwent a restructuring that saw the disposal of its stakes in Scomi Oilfields Ltd, Scomi Sosma Sdn Bhd and Scomi KMC to its 65.65 per cent owned listed arm, Scomi Marine Bhd - has been actively bidding for new jobs worth over US$1 billion (RM3 billion) in Malaysia and internationally.

Shareholders Tussle …

Its CEO and key shareholder Shah Hakim purchased 1.42 million shares on the open market at 42 sen per share during 20 – 21 May 2013. He currently (May 2013) holds a 12.17% stake in the company after actively purchasing Scomi shares in the past months prior to May 2013. Earlier in 2013, his shareholding stood at 11.49%.

The net asset value per share of the oil and gas player stood at 32 sen as at end Dec 2012.

Meanwhile Tan Sri Abu Sahid Mohamed said in May 2013 he could increase his stake in Scomi Group Bhd as he believes that the company is undervalued.

Abu Sahid, who owns 6.8 per cent stake in Scomi, however, looks to be staying for the long run. The tycoon last bought Scomi shares on March 19 2013 when he acquired some 1.19 million shares.

Shah Hakim is also a key shareholder of Scomi Group.

To recap, Abu Sahid had disputed IJM Corp Bhd's emergence as a shareholder in Scomi, citing that it will dilute the stake of current shareholders.

IJM's entry into Scomi is said to have the backing of Shah Hakim. Under the deal, Scomi would issue RM110 million worth of convertible debt to IJM, which, upon conversion, would see the construction company owning 24.3 per cent of Scomi.

The convertible debt proposal went ahead after gaining shareholders' approval.

He is quitting as Avalon Minerals Ltd chairman. Abu Sahid had bought into Avalon, a company listed on the Australian Stock Exchange, in 2008 and controls about 11 per cent of its shares. However, he has no plans to hive off his stake in the Australian company as he is betting that the mineral exploration company will deliver in the long run.

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