Friday, July 23, 2010

Ekuinas sees Tanjung Offshore revenue doubling

KUALA LUMPUR: Ekuiti Nasional Bhd (Ekuinas), which is investing RM73.4 million in TANJUNG OFFSHORE BHD [] (Tanjung Offshore), hopes to see the latter's revenue double in the mid-to-long term.

Ekuinas CEO Datuk Abdul Rahman Ahmad said on Friday, July 23 that its investment horizon as a strategic investor was between three and five years.

On the plans for Ekuinas, he added Ekuinas hoped to announce its next investment project by the end of the year.

"We are talking to a number of parties and will not rule anybody out, but we hope that our next announcement will be in line with a buyout of non-core assets," he said at a press conference after Tanjung Offshore shareholders approved Ekuinas' investment.

Abdul Rahman said Ekuinas would be looking at GLCs, MNCs and PLCs that operated within any of the six core sectors Ekuinas was interested in -- health-care, education, retail, leisure, services and fast-moving consumer goods.

On the Tanjung Offshore investment, it involved Ekuinas subscribing for 26 million new shares under a special share placement exercise and the acquisition of another 30.5 million existing shares from former executive director Abdullah Hashim and his affiliates. The shares would be acquired at RM1.30 per share.

"We are pleased by the outcome of this EGM and that the shareholders of Tanjung Offshore gave full support to our entry," he said.

Asked whether Ekuinas would raise its stake in Tanjung Offshore, Abdul Rahman said that they would welcome further opportunities to invest, but that for the time being "we are happy with what we have."

Tanjung Offshore managing director Omar Khalid said that he looked forward to the new partnership with Ekuinas and to taking business to the next level.'' Omar is the largest shareholder with 40.8% stake.

Of the RM73.4 million investment, RM33 million would be used for Tanjung Offshore to expand.

Tanjung Offshore currently owns 16 vessels and the expansion plans did not involve more acquisitions as its gearing was still high.

The private placement will reduce the company's gearing from 1.8 times to 1.7 times.

Omar said the company was bidding for more than RM1 billion in projects, of which its bidding success rate is about 30%.

Analysts said Tanjung Offshore was set to see a strong earnings recovery in FY2010 and FY2011, driven by cash flow from its vessels and the cessation of losses from its UK subsidiary Citech Energy Recovery Systems UK Ltd.

No comments:

Post a Comment