EONCAP, YTL,PETRA,E&O, KPJ,MRCB, TALIWORK

Two major shareholders of EON Capital Bhd (EON Cap) – Singaporean Rin Kei Mei through Kualapura Sdn Bhd andLintang Emas Sdn Bhd, and the Tiong group through RH Development Sdn Bhd – have received the green light fromBank Negara to negotiate the sale of their stakes in the banking group. EON Cap said its board had been notified by RHDevelopment Corp, Kualapura and Lintang Emas that they had received approval from Bank Negara to start negotiations withHong Leong Bank Bhd (HLB) (HLBK MK, Hold, TP: RM8.71). Based on past merger and acquisition (M&A) transactions, whichwere largely a combination of share swaps and some cash outlay, the potential merger could also enable EON Capshareholders to ride on HLB’s future growth and upside in share price. (StarBiz)
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The Penang Development Corp (PDC) and YTL Land & Development Bhd yesterday signed an agreement to developluxury apartments on a 1.38ha land in Lebuh Farquhar in Penang. Each party will hold 50% equity in the project and theycould start anytime soon, Penang Chief Minister Lim Guan Eng said. A hotel was originally to be built on the site by PDCHeritage Hotel Sdn Bhd, a joint venture between YTL Hotels & Properties Sdn Bhd,a wholly-owned subsidiary of YTL Corp Bhd(YTL MK, Buy, TP: RM8.00) and PDC. After the project was shelved due to the economic slowdown, PDC Heritage Hotelsought to change the type of development from hotel to luxury apartment. Subsequently, it applied to change the type oflandholding to freehold and the condition of land use to residential and business. "The state government approved PDCHeritage Hotel's application on June 3 2009 subject to three additional conditions," Lim said. He said the building height mustfollow the Unesco guidelines which was not more than 5 storeys and all costs pertaining to condition changes which exceededRM8.2m must be borne by YTL Hotels. The new project comprises three six-storey 76-unit apartment blocks including anunderground basement, a clubhouse and a restaurant. (BT)
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Petra Perdana Bhd (PETR MK, Sell, TP: RM0.73) has made certain declarations in relation to its divestment of shares inPetra Energy Bhd, including saying that Tengku Datuk Ibrahim Petra will continue to helm both companies. “IbrahimPetra will continue to helm, post divestment, both Petra Perdana and Petra Energy in his capacities as executive chairman andCEO, and executive chairman respectively,” the company said in a statement. It also said Petra Perdana would continue tooperate its business in the offshore marine industry. In this regard, the company would continue to explore opportunities in thevessel charter business in line with the new deliveries and improving market conditions. (StarBiz)

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Maybank Investment Bank Bhd and Mizuho Securities Co Ltd (MHSC) have formed a strategic alliance to worktogether in areas such as primary and secondary markets, mergers and acquisition advisory and Islamic markets. In ajoint statement yesterday, the two parties said they would leverage on their mutual expertise, experience and robust globalnetworks to further develop markets in Malaysia, Japan, and other regions. The statement preceded the signing of amemorandum of understanding between Maybank IB and MHSC. (Financial Daily)

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Eastern & Oriental Bhd has proposed to dispose of a piece of freehold land in Kuala Lumpur to Menara Hap Seng SdnBhd for RM103m with the proceeds to be used as working capital and repay bank borrowings. The property developersaid in an announcement that its wholly owned unit, Radiant Kiara Sdn Bhd had entered into a sale and purchase agreement tosell the 0.46ha parcel of freehold land with preliminary construction works in KL to Menara Hap Seng. E&O said the proposeddisposal is expected to result in a one-off gain of RM31m. The proceeds would be fully used by 2010 as working capital andpare down its borrowings of RM1.03bn as of Nov 30, 2009. If the entire proceeds were used to pare down borrowings, theannual savings in interest is expected to be about RM5.8m based on average interest rate of 5.7% per annum. On March 31,2009 the net book value of the land stood at RM55.1m and was acquired for RM26.58m in May 2006. The proposed disposal isexpected to be completed in 1Q 2010. (Financial Daily)

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KPJ Healthcare Bhd has estimated a capital expenditure (capex) of RM150m for next year. Chairman Tan SriMohammad Ali Hashim said the money would be spent on upgrading its current medical facilities and building new hospitals inthe country. “The company usually spends around RM150m annually on capex but this also depend son the stability of theeconomy,” he said. “In spite of the economic slowdown, KPJ is confident that its performance for fiscal year 2009 would bebetter than the previous year,” he said. At the EGM, KPJ received approval from its shareholders to proceed with its proposedshare split, bonus and warrant issues. The exercise will involve the sub-division of one ordinary share of RM1 each in KPH into2 ordinary shares of 50 sen each, followed by a 1-for-4 bonus issue and a subsequent 1-for-4 free warrant issue. Uponcompletion of the exercise and full conversion of the warrants, KPJ will increase its share base to 660m from 211m. (Starbiz)

MalaysiaMalaysian Resources Corp Bhd (MRCB) has made an informal approach to buy or help develop thousands of acres offederal land in the Klang Valley. But its recently-appointed chief executive officer Mohamed Razeek Hussain stressed that noformal bid has been submitted. "We have expressed our interest. It's up to the government to whom it wants to allocate theland," Razeek said in response to whether MRCB had made a bid to the government for prime land in two areas. He wasspeaking after MRCB's extraordinary general meeting on its proposed rights issue in Kuala Lumpur yesterday. The governmentrecently announced plans to sell or co-develop its prized landbank in Cheras, Kuala Lumpur and Sungai Buloh in Selangor.The latter land is sited near an industry park in Kota Damansara, with an estimated market rate of RM30 per sq ft. Razeek saidMRCB is keen on increasing its landbank to turn it into mixed development projects. MRCB, he said, is unlikely to make anycash call in the next 5 years after its proposed renounceable one-for-two rights issue. Shareholders yesterday gave their nodon the exercise that will raise gross proceeds of between RM508m and RM541m. Meanwhile, the rights issue at RM1.12 ashare will raise MRCB's share capital to between 1.36bn and 1.44bn from the present 907.62m shares. (BT)

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Taliworks Corporation Bhd has proposed to issue RM395m of secured bonds 2009/2024, which would partly financethe early redemption of its convertible bonds that will expire in 2012. It told Bursa Malaysia that the 2009/2024 bondswould be issued via its special purpose vehicle, Destinasi Teguh Sdn Bhd, which would act as a funding conduit to raise fundsfor the group. Funds raised from the proposed 2009/2024 bonds will be used to redeem 50% of the RM225m nominal value of2.25% convertible bonds 2007/2012. The statement also said that the funding exercise will suit the group’s long-term financingneeds and mitigate early redemption risk of the convertible bonds which will arise in 2010. On Dec 17, Taliworks also enteredinto a bond purchase agreement with the holders of the 2007/2012 bonds to purchase 50% of the bonds. Despite using part ofthe proceeds raised to redeem 50% of the 2007/2012 bonds it had offered to purchase the bonds to reduce financing costsbecause of a possible delay in the implementation of the private debt securities. (Financial Daily)

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The government plans to compulsorily buy a piece of land measuring 0.38ha on Jalan Tun Razak, Kuala Lumpur, fromproperty developer IGB Corp Bhd. The land is near Megan Phileo Promenade and a stone's throw from the Petronas TwinTowers. Should the government pay the prevailing price of around RM1,200 per sq ft for the piece of land, the land may be soldfor some RM40m, a source said. It is understood that the government may build a fire station on that location. "IGB has alreadyreceived a development order to build 166 units of high-end service apartments with 200,000 sq ft of net saleable area," asource told Business Times. The source added that IGB hopes to get at least RM1,200 per sq ft, given that land prices invicinity of the Kuala Lumpur City Centre ranges from RM1,900 to RM2,200 per sq ft. Should IGB be paid RM1,200 per sq ft, itmay get some RM40m from the government. "The project is in the pipeline, but it has not been launched yet," another sourcesaid. (BT)

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Car sales expanded for the second consecutive month in November indicating market conditions have improvedcompared with a year earlier. The Malaysian Automotive Association (MAA) said passenger and commercial vehicle salesvolume grew 23%, or 4,335 units, to 45,200 units in November from 40,865 a year earlier. Production of vehicles was 17.26%lower at 40,074 units from 48,431 units a year earlier. YTD, car sales volume fell 3.75% to 489,237 units from 508,290 units ayear earlier. Production also fell 10.77% to 444,755 units from 498,419 units. For December 2009, MAA said year-on-yearexpansion of car sales was expected although month-to-month volume was likely to be lower, as December was a vacationand it was normal for customers to take delivery of vehicles in 2010 instead of 2009 year-end. (Financial Daily)