Reports » Malaysia

Malaysia stock market and companies daily report (February 21, 2013)

Contributed by Shares Investment

MAS Orders 36 Planes For US$840m
Malaysia Airlines (MAS) has signed a purchase agreement with Avions de Transport Regional (ATR) for 36 ATR 72-600s valued at over US$840 million (RM2.6 billion). According to the national carrier, the deal is a follow-up of the memorandum of understanding announced by the two parties last December, with deliveries commencing by mid-2013. The new aircraft is expected to further expand Firefly and MASwings’ regional offerings by adding new routes, frequencies and connectivity to MAS’ global network. “The new aircraft will further improve the guest experience on our community airlines, as they connect more and more people across Malaysia and the surrounding regions,” said chief executive officer Ahmad Jauhari Yahya. MAS currently has 22 ATR 72-500s in its fleet, operated by its subsidiaries Firefly (12) and MASwings (10). The latest order will bring MAS’ ATR purchases since 2007 to total 42 aircraft.
Significance: Ahmad Jauhari believes the introduction of the new aircraft will enable MAS’s subsidiaries to reinforce their position in the community markets and key business routes, whilst reaffirming the MAS group as a major operator of ATRs in Asia.

Digistar Eyes RM200m ICT Jobs
Digistar Corporation has tendered for information and communications technology (ICT) jobs up to a value of RM200 million, of which 80 percent of the tender jobs are from the local market and the remaining from overseas; said managing director Datuk Wira Lee Wah Chong. The electronic systems engineering and integration group has tendered broadcast systems integration jobs in Indonesia and Brunei. The results of the tender should be known in the next three to four months. Currently its order book stands between RM30 million and RM40 million. Moving forward, the group plans to expand into the broadcasting and interactive pay television segments to grow its local business, and to open up new market in the Southeast Asia region. Besides that, it will embark into central monitoring system (CMS) engineering, which could be a key contributor to the group. Digistar will start providing CMS in Malaysia by April. The company will also engage in the operations of central monitoring stations to seek opportunities and new growth areas.
Significance: Datuk Wira Lee believes the group’s prospects are favourable in tandem with the positive outlook of the industries as well as the development of new projects, which will boost its business growth.

Scomi Gets Nod To Sell Scomi Oilfield
Scomi Group has got the nod from its shareholders for the restructuring exercise of its subsidiaries, Scomi Oilfield (SOL) and Scomi Marine (SMB). The group had earlier proposed to dispose its entire stake of 76.08 percent in SOL to SMB for approximately RM776.03 million, which will kick off the rationalisation process within the group. The proposed restructuring was mooted by the group’s shareholders at the annual general meeting yesterday, as the group faces with mounting debt, bonds and a pull option to deal with, said Chairman Tan Sri Asmat Kamaludin. “This restructuring is to enable the group to be in a better position to raise funds if needed,” he added. In the meantime, SMB is doing more on the transportation of coal and other items. Asmat believes the reorganisation practice will lead to a better healthy cash position in terms of gearing, which is expected to lower the group’s gearing level to 1.2 times compared with 2.09 times as at 31 December 2011.
Significance: With the acquisition of SOL, SMB will be more involved in trading support services. According to the chairman, the group will continue to eye for new investment opportunities in the future but would currently remain focused on restructuring.