Friday, June 25, 2010

Alam Maritim receptive to M&A, says chairman

KUALA LUMPUR: ALAM MARITIM RESOURCES BHD [], an offshore maritime transportation service provider, is open to the idea of mergers and acquisitions (M&A) moving forward, especially with the current stiff competition in the local market.

Its chairman Datuk Ahmad Sufian Abdul Rashid said although business has been slowing down, new players were coming in and offering much lower charter rates.

"There is a need for consolidation among local players so that they can capitalise on each other's strength, especially with rising competition by new players and foreign companies," he told reporters after the company's annual general meeting here on Friday, June 25.

He said via consolidation, companies could jointly use their existing strengths and venture into potential overseas market in the future.

On whether the company was in talk with any party for M&A, he said: "No. (But) we are always open to the idea. Maybe after this, there will be companies that want to talk to us."

Moving forward, Ahmad Suffian said the company would shift its focus on niche markets like pipe-laying barge and diving support services.

Meanwhile, group managing director/chief executive officer Azmi Ahmad said the charter rate now was at an average of US$1.60 to US$1.70 (RM5.18 to RM5.51) per bhp (brake horsepower) as compared with US$2.30 to US$2.50 per bhp, two to three years ago.

On fleet expansion, he said, the company was currently reconciling its position and looking at assets that could give greater margin.

To date, it owns 36 offshore supply vessels with another four new vessels ready for delivery from now until end-2012. This year, it will receive a pipe-laying barge and anchor handling tug.

"With Petronas (Petroliam Nasional Bhd) looking at brownfield and existing wells around the region, it should bring back demand for offshore vessels. We think the demand will improve by mid-2011," said Azmi.

On the warrant of arrest and a writ of summon by MLC Barging Pte Ltd, Azmi said the company has passed the matter to its lawyer.

"As far as we know, we have fully paid for the vessels and has registered as the owner," he said.

He said this was third-party dispute involving MLC Barging and MLC Shipping about the payment, of which Alam Maritim has no control.

Azmi, however, said although there would be no direct impact on the company financially at the moment, the company would have to look at the matter closely if the matter took a longer time to resolve, resulting in the retention of the vessels and not allowing them to operate. ' Bernama

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