Monday, September 8, 2014

WZSatu ... Venture Into O&G!!

It is looking to diversify into the oil and gas sector to pave the way for its long term growth.

The group aims to have more than half of its revenue fro the financial year ending Aug 31 2016 to come from its O&G business.

The group plans to make another O&G asset acquisition in 2015.

In July 2014 it proposed to acquire Misi Setia Oil & Gas Sdn Bhd for rm27 million. It is mainly involved in design, procurement, fabrication and installation and commissioning of skid packages as well as onshore O&G pipeline transmission systems and plant terminal projects.

The company is also expected to get a slice of Petronas’s RAPID project.

Formerly it has been specializing in the manufacturing and trading of precision cold down steel bars used mainly in the office, computer and auto segments.

In Aug 2014 Uzir began acquiring a stake in the group, eventually ending up as the largest shareholder with 52.7 million shares or a 27.7% stake as at Aug 22 2014.

Uzir said he is interested to transform the group and diversify out of its steel business.

Tan Ching Kee the group MD remains one of WZSatu’s major shareholder with a 22.5% stake after paring down his controlling stake. The other shareholder is executive director Datuk William Tan with a 6.14% stake.

It was reported that its net profit will grow at a compound annual growth rate of 67% from FY2014 to FY2016.

Upside risks include the potential acquisition of a new oil and gas business, upside to bauxite reserves, potential rationalizing of steel business and reinvestment into the O&G business with a higher return on investment, and stronger than expected growth from civil engineering.

In July 2014 the group announced some fund raising proposals, including private placement to bumi investors to raise some rm62 million cash for its O&G venture.

Once all proposals have been subscribed to, it hopes to have raise rm133 million by mid Oct 2014.

It also has a 49% stake in SE Satu Sdn Bhd which has an exclusive contract to mine, extract and produce bauxite ore from eight hills in Kuantan, Pahang for three years.

The mined ore is then shipped to China for refining and sale. The ming venture generated about half of the group’s profit in FY2014.

Uzir is the chairman of Kumpulan Unik Bhp Sdn Bhd and Kota SAS Sdn Bhd. He is on the board of Kurnia Setia Sdn Bhd.

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