28th April 2010 – Highlights on Malaysia

HIGHLIGHTS
On Malaysia

• TM: Mulls over quad play
• Media Prima: Moves to delist NSTP
• Sunrise: May consider REIT at later stage
• SunCity: To buy Sunway Parking Management from Sunway Pyramid
• Mutiara Goodyear: To launch projects worth RM1.6bn
• Transmile: Files civil suit against former CEO Gan
• Consumer: Beer price to go up 3.6% in May
• Economy: Ringgit appreciation not a concern, says Zeti

TM: Mulls over quad play
A mobile/cellular gamble may be the next thing that Telekom Malaysia Bhd (TM) (T MK, Hold, TP:RM3.54) will have to consider getting itself into if it wants to enhance its existing triple play offering. But TM will have to wait till early next year as it had in 2008 signed an agreement with Axiata Group Bhd that forbids it to get involved in the cellular business. However, early next year it will be free of that bond and can offer the missing link which is the cellular/mobile services to complement its triple play offer. (StarBiz)
Media Prima: Moves to delist NSTP
Media Prima Bhd (MPB) (MPR MK, Buy, TP:RM2.17), which has completed its takeover exercise of the New Straits Times Press (M) Bhd (NSTP), is proceeding with the delisting of NSTP group. MPB said it had requested NSTP to undertake the proposed delisting exercise. As of 14 Apr 2010, MPB holds an 89.62% stake comprising 194.68m shares of RM1 each in NSTP. MPB said it was prepared to extend a voluntary general offer to acquire all the remaining shares not already owned at RM2.40 per NSTP share, to be satisfied by the issuance of six shares each in MPB at an issue price of RM2 and one new warrant in MPB for free, for every five NSTP shares accepted. (Financial Daily)

Sunrise: May consider REIT at later stage

Sunrise Bhd (SUN MK, Buy, TP:RM3.30) may consider injecting some of its property assets into a real estate investment trust (REIT) as they begin to deliver stable income, says its chairman Tong Kooi Ong. “We have invested considerably in a pool of investment assets over the last few years, which are now starting to bear fruit,” he said. “For the medium term, our overseas focus will be on Canada. We do not have plans for the moment to venture into Vietnam or China”, he added. Sunrise plans to launch two projects later this year, an office tower project in Kuala Lumpur, as well as a residential project in Vancouver, Canada. (BT)

SunCity: To buy Sunway Parking Management from Sunway Pyramid
Sunway City Bhd (SunCity) (SCITY MK, Buy, TP:RM4.33) has proposed to acquire Sunway Parking Management Bhd (SPM) from its 52%-owned subsidiary Sunway Pyramid Sdn Bhd (SPSB) for RM12.6m. SunCity said SPM owned a piece of vacant land adjacent to the Sunway Pyramid Shopping Mall and the land offered an attractive development opportunity given its proximity to the mall. It added that a 28-storey mixed commercial building with office and retail elements and with 1,027 car parks were planned for development on the piece of land. Purchase consideration comprised of RM1.17m for SPM shares and the repayment of RM11.43m in shareholders’ advancement owing to SPSB. (Financial Daily)
Mutiara Goodyear: To launch projects worth RM1.6bn
Mutiara Goodyear Development Bhd plans to launch four housing projects worth RM1.6bn this year to ride the economic recovery. The projects would be developed over a 40ha land in Kuala Lumpur, Selangor and Penang. “People are still buying properties and demand would be there for at least another two to three years,” executive chairman Hamidon Abdullah said. The company still has more than 350ha of landbank which can be developed for another RM3.4bn. (Malaysian Reserve)
MBfH: Shareholders reject privatisation bid
Minority shareholders of MBf Holdings Bhd (MBfH) have rejected a selective capital reduction and repayment proposal (SCR) in an extraordinary general meeting (EGM). This result had scuttled the privatization bid by its CEO Tan Sri Dr Ninian Mogan Lourdenadin. On Jan 11, Lourdenadin offered to privatize the company through the proposed SCR which would see minority shareholders receive 65 sen per share and warrant holders 5 sen per warrant. It was Lourdenadin’s second bid to take MBfH private as he has previously offered minority shareholders 21.5 sen per share a few years ago. (Malaysian Reserve)
GCB: Two major shareholders launch takeover bid
Two major shareholders of General Corporation Bhd (GCB) have launched a takeover of the company for about RM505.5m or RM1.70 per share. GCB said it had received a letter from Consistent Record Sdn Bhd (CRSB), a company owned by Tan Sri Low Keng Huat and Datuk Marco Low Peng Kiat, to acquire its entire business and undertakings, including all assets and liabilities. CRSB had stated in the letter than certain family members of the shareholders and the shareholders’ intend to transfer their 32% stake in GCB to the company. (Malaysian Reserve)

Deleum: Eyes RM200m-RM300m deals
Deleum Bhd expects to see continuous growth in 2010, backed by new projects and its entry into a new segment in the industry. It is bidding for contracts worth between RM200m and RM300m this year mainly for its offshore business which currently represents 95% of its bottom line. “We have bid for jobs and will continue to participate and enter tenders which are in nature with our business,” said Deleum group managing director Chandran Aloysius Rajadurai. The company currently has an order book worth RM1bn that will keep it busy until 2015. (BT)
Transmile: Files civil suit against former CEO Gan
In a rare move, a listed company that is facing a possible delisting if it does not regularise its financial position has taken a civil suit against its former principal executive for grossly overstating the company’s revenue more than three years ago, an incident that was uncovered in 2007. Transmile Group Bhd announced that it has filed a civil suit against its former CEO Gan Boon Aun and former CFO Lo Chok Ping for failing in their duties and trust towards the company. It claimed the defendants had breached their duty of fidelity and trust to the company by grossly overstating  the revenue and causing questionable payments and receipts pertaining to transactions between its two wholly-owned subsidiaries and several parties. (Financial Daily)
TRC Synergy: Gets RM20.4m Putrajaya job
TRC Synergy Bhd’s subsidiary, Trans Resources Corp Sdn Bhd, has bagged a RM20.39m contract for the construction of government apartments in Putrajaya. TRC said it had on Apr 23, received a letter of award from Putrajaya Holdings Sdn Bhd for the proposed construction and completion of remaining and rectification works for 622 units of government apartments at Parcel 5R6 in Precinct 5, Putrajaya. (Financial Daily)
Consumer: Beer price to go up 3.6% in May
Beer and stout will be dearer starting next month, thanks to the sharp increase in input costs, particularly the imported malt. According to Carlsberg Brewery (M) Bhd managing director, Soren Ravn, the country’s breweries had agreed to raise the prices of beer and stout by an average of 3.6% next month to pass on the higher input costs to consumers. “The price of raw material has increased by an average of 10% annually for the last five years, putting pressure on margins,” Ravn said. He also mentioned that the recommended retail price would be industry wide, involving the main breweries, namely Guinness Anchor (M) Bhd and Carlsberg. (Financial Daily)
Economy: Ringgit appreciation not a concern, says Zeti
The recent appreciation of the ringgit was not a concern, said Bank Negara Malaysia (BNM) governor Tan Sri Dr Zeti Akhtar Aziz, explaining that the strong local currency reflects the improved economic fundamentals. However, Zeti revealed that the central bank would be concerned if there was “excessive movement” on the ringgit within a short period of time. It also posed concern if there were disorderly market conditions or any misalignment to economic conditions. “Right now, the market has remained orderly and is seen to reflect market conditions and underlying fundamentals” she said. Zeti also said that decision for interest rate normalisation would be made at the next policy meeting on May 12 and 13. (Financial Daily)