Friday, October 25, 2013

Konsortium Logistik - eyeing energy and infra division

An integrated logistics service provider is eyeing up to 10% revenue contribution from its energy and infra division over the next two years from 2013. The division contributed rm3 million or 1% of the group’s revenue in 2012. It plans to expand this division as oil and gas is the key market with abundant ongoing activities in Malaysia for the next three to five years from 2013.

Ekuinas had a 56.5% stake in Konsortium Logistik for rm207 million or rm1.55 per share. In Oct 2010 it makes a takeover offer for all the shares it does not own in Konsortium at rm1.55 per share but KLB will remain as a public listed company after the takeover.

As at June 30 2010, the company had cash of rm38.9 million and rm94.44 million in borrowings. Its net debt of rm55.54 million translates into a net gearing of 0.17 times.

Konsortium Logistiks core business of logistics and charter is highly competitive and its earnings while steady can hardly be classified as stellar.

Ekuinas has board representation in Konsortium.

Its CEO had stated in 2010 that its next step would be a widening of its reach. The plan for the company is to expand its logistics services for other industries such as oil and gas. In 2010, the auto sector is Konsortium Logistik biggest presence.

Among the reasons Ekuinas chose the company was that it is one of Malaysia’s leading providers with a considerable underutilised balance sheet and assets, which offers significant value creation.

But could it also be part of a much bigger plan? In June 2010 Ekuinas had acquired a 20% stake in Tanjung Offshore Bhd which offers services to the oil and gas industry.

Notably Ekuinas seems to have a knack for picking companies where there is a possibility of securing a big block. It was reported in Sept 2010 that Loo who had a 14.7% stake in KLB was in talks to sell his substantial stake in the company.

At that juncture, the identities of the interested parties and the pricing for Loo’s stake are still unclear. People familiar with him confirmed that he is in talks to sell his block, which will see him exiting the company.

Loo is also CEO of Pelikan Intl with majority stakes held.

The controlling shareholders of Konsortium Logistik are Che Azizudin Che Ismail, Zulkifi Sarkam, Mohd Amunudin Mustapha and Izhar Che Mee, who own Dream Hectares Sdn Bhd which has a 25.8% stake in Konsortium Logistik. Another substantial shareholder is LTH holds 10.6% stake in the company.

Loo has been on the board of Konsortium Logistik since Oct 1992, a month after his former partner Mirzan Mahathir joined.

Mirzan exited the company in Aug 2007, ceasing to be a substantial shareholder. Two months before his exit, Mirzan had stepped down as chairman and executive director of the company. At that time, Loo and Mirzan together controlled about 38% of the company.

Konsortium Perkapalan, the predecessor of Konsortium Logistik, was floundering after the Asian Financial Crisis, with debts westimated at rm1.7 billion. Petronas unit, MISC stepped and acquired Konsortium Perkapalan’s assets for US$220 million.

Loo is an old hand in the logistics and transportation business. He has been on the board of Transmile Bhd and he ran Konsortium Perkapalan Bhd and Diperdana Holdings Bhd (Pelikan Intl).

Loo and Mirzan were also partners in Pelikan…

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