Reports » Malaysia
Malaysia stock market and companies daily report (September 05, 2013)
Affin Closer To Purchase Of Hwang-DBS Assets
Affin Holdings edged out larger rival AMMB Holdings to begin exclusive talks with Hwang-DBS (Malaysia) on the proposed acquisition of Hwang-DBS’ investment banking, futures and asset-management businesses. The deal would involve a 100 percent stake in Hwang-DBS Investment Bank and HDM Futures, a 53 percent equity interest in Hwang Investment Management and a 49 percent equity interest in Asian Islamic Investment Management. At this juncture, there was no mention of pricing, although previous reports had speculated that it would be in the range of 1.2 times to 1.8 times price to book. This implies that the price tag could be as high as RM6.66 per Hwang-DBS share, based on the highest end of 1.8 times price to book. In terms of financing the deal, Boustead Holdings, of which Affin is a unit, has said that it could go to the capital market. Alternatively, it could increase its cash flow by disposing of some of its non-core assets to raise funds.
Significance: The latest development brings Affin a step closer to becoming Malaysia’s third-largest stockbroker with a market share of more than 9 percent, just behind CIMB Investment Bank and K&N Kenanga Holdings.
Daya Materials Ink 2 Charter Deals
Oil and gas player Daya Materials announced yesterday that it had inked two charter contracts with two companies based in Norway. The first agreement involves the charter of a DP2 offshore subsea construction vessel from Siem Offshore Rederi AS for a period of five years beginning 15 December 2013. Thereafter, Daya Materials would have the option to buy the vessel. The company also entered into a long-term charter with Technip Norge AS in relation to a three-year deal for the charter of another offshore subsea construction vessel. Commencing in 2014 with options to extend further up until 2020, the charter is valued from RM100 million to RM176 million. The company has identified the offshore construction and subsea installation sector as one of the key areas of growth over the next few years. The charters will further strengthen Daya Materials’ position as a prominent solution provider not only in Malaysia, but globally.
Significance: The charter deals will enable Daya Materials to make use of its newly secured vessel and multi-purpose support spreads to combine its subsea services and expertise to deliver cost-effective, tailored solutions to meet its individual client needs.
TSH Resources To Raise RM48m Via Placement
In a filing with Bursa Malaysia, TSH Resources proposed a private placement of 20.86 million new shares at a price no lower than RM0.50. Based on the issued and paid-up share capital of 855.2 million shares as at 3 September, the new shares represent 2.5 percent of TSH Resources’ outstanding shares. The exercise, which may be carried out in tranches, is expected to raise RM47.8 million. The proceeds from the private placement will be utilised by TSH Resources for working capital purposes or future investment as well as to defray the expenses in respect of the proposal. At the same time, the placement will also strengthen the company’s capital base and increase the liquidity of the trading in its shares.
Significance: After due consideration of the various fund raising method, the view of TSH Resources is that raising funds by way of a private placement would be the most appropriate avenue of fund raising as it will enable the company to raise funds expeditiously and cost effective as opposed to bank borrowings.
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