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Headliners (KPJ Healthcare, SapuraCrest, Tenaga Nasional, Latexx Partners, Sime Darby, Jerneh Asia)
Malaysia Headliners | 28 July 2011
By: Ong Qiuying
Articles (131) Profile

KPJ Healthcare In JV To Develop A RM47m Specialist Hospital
KPJ Healthcare, a subsidiary of Johor Corp, has signed a 60:40 joint venture agreement with Yayasan Islam Perlis to develop a RM47m specialist hospital in Kangar, Perlis. This is the first private specialist hospital to be built in Malaysia’s smallest state, and is expected to complete by Dec-13. The new specialist hospital, a 6-level building measuring 123,000 sq ft in built-up area, will have 60 beds and facilities such as 3 operation rooms alongside an intensive care unit and a labour room. KPJ is leveraging on its 30 years of healthcare experience to aggressively expand its network of hospitals (27 with the addition of Perlis Specialist Hospital) to cater to the country’s demand for healthcare services. KPJ has 4 other specialist hospitals in Klang, Johor, and Kota Kinabalu, slated to open within 2 years. It expects to register a return on investment from its hospital projects within 3 to 4 years.

SapuraCrest And Kencana Offered To Merge
Maybank Investment Bank and CIMB Investment Bank have teamed up to offer SapuraCrest Petroleum and Kencana Petroleum to merge. The merged entity is expected to have a market capitalization of RM10b with some RM6b worth of assets, creating the largest local oil and gas service provider by assets. A special purpose vehicle Integral Key (IK) is formed and yesterday offered to acquire the assets and liabilities of SapuraCrest and Kencana in exchange for cash and IK shares. The cash offered to SapuraCrest is RM875m or about 14.9% of the deal, while cash offer for Kencana is RM969m or 16.2% of the deal. Under the proposed deal, IK will maintain the listing status of only one of the companies, while the other will be delisted. The proposed merger is believed to be timely, in light of the investment cycle in the oil and gas sector. Both companies are said to have commendable individual capabilities and competencies, which are complementary across the value chain.

Tenaga Nasional Targets 25% In Bottom Line From Overseas Operations
Electricity provider Tenaga Nasional expects its overseas operations to contribute 25%, up from its current 10%, to the company’s bottom line within three years. Tenaga Nasional is expanding its operations in the Asean region and is sourcing for opportunities in the Middle East. Analysts are pleased to hear that the political unrest in the Middle East is not holding back Tenaga Nasional from expanding its business into the region. The Middle East is a definite choice of business expansion for Tenaga Nasional as the region holds most of the world’s oil reserves and has a large untapped gas reserve. Meanwhile, it is said that the company’s move into geothermal energy in Malaysia is part of its long-term strategy to diversify into renewable energy sources, given the increasing coal and gas prices. It also appears that the company is sourcing for various other energy sources for that cause.

Latexx To Complete Due Diligence On Potential Merger With YTY
Latexx Partners (Latexx) is poised to complete a due diligence on YTY Industry Hldgs (YTY) by early August, according to chief executive officer Low Bok Tek. Latexx is proposing to take over YTY for RM1.25b by paying 30% in cash, with the balance of the assets being swapped for Latexx shares. This deal will be the first takeover of a rival glove maker in four years, if successful. Latexx has just completed its capacity expansion to 9b pieces of gloves a year and is preparing for the next phase with a capital expenditure of about RM70m for expansion of 3b pieces. If Latexx’s merger with YTY goes through, it will be the biggest nitrile glove maker with a combined installed capacity of 15.5b pieces a year. Latexx’s top executives are optimistic about the YTY takeover as despite being privately held, YTY is not a small player. Furthermore, Latexx’s outlook appears promising as the company is producing more gloves and the selling prices are still holding up.

Sime Darby Revs Up Business In China With More Investments
Sime Darby’s motor arm, the largest revenue generator, will keep spending big in China to help rev up its luxury and super luxury car business. Sime Darby Motors managing director Datuk Lawrence Lee said multi-million dollar investments are in the pipeline to set up more BMW 4S (sales, services, spare parts and systems) centres in China. It has just launched its 10th BMW 4S centre in Chengdu, costing RM60m. Next in line will be another BMW 4S centre in the city of Chongqing that should cost as much as the one in Chengdu or more, followed by several more 4S in other key cities. Sime Darby Motors had already spent some RM500m since it started its BMW business in China in 1994. As vehicle sales in China is the world’s largest and fastest growing automotive market coupled with the robust demand for BMW vehicles, the company expects its expansion to be a timely one.

More Jerneh Asia’s Investors Convert Their Warrants Into Shares
Jerneh Asia’s (Jerneh) warrant holders have been converting their warrants to mother shares, ahead of the insurer’s special dividend payment, amounting to as much as RM3.93 a share via a dividend and capital repayment plan. Since late May, more than 20.8m warrants of the company, almost one-third of the total 66m issued Jerneh warrants, have been converted into mother shares at a strike price of RM1.60. Jerneh has been searching for a new core business after selling its 80%-owned Jerneh Insurance. Since the sale, the company has proposed a reverse takeover of a Sabah-based property developer and also signed a memorandum of understanding with Generasi Cipta to buy 60%-owned property firm Sagajuta (Sabah) for an undisclosed amount. If the proposed acquisition is finalised, it will pave the way for a backdoor listing for Sagajuta (Sabah), the developer of the RM1.2b 1Borneo development.

Qiuying oversees the construction and real estate investment trusts sectors at Shares Investment.

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