HLBK, MAS, PETRA & LOCAL business news

The Board of EON Capital Bhd (EON Cap) is expected to send in a letter to Bank Negara possibly today for permission to talk to Hong Leong Bank Bhd (HLB), (HLBK MK, Hold, TP: RM8.71) for a potential sale of its assets and liabilities.
EON Cap held a board meeting last Thursday to discuss the invitation from HLB, which had earlier obtained the green light from Bank Negara to negotiate on an institutional basis. On an individual basis, HLB has already received the nod to talk to two major shareholders – Rin Kei Mei and Tan Sri Tiong Hiew King – who own a combined indirect stake of 31.7% The Employees Provident Fund (EPF), which owns a 10.7% stake in EON cap and 9.31% in HLB, is expected to study the proposal via the board of EON Cap. The much awaited proposal from HLB, which announced on Jan 6 that it intended to purchase the assets and liabilities of EON Cap, will be submitted after EON Cap receives the go-ahead from Bank Negara for the talks. Under the assets and liabilities method, HLB only requires 50% shareholders’ approval plus one share for the deal to go through. (StarBiz)
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MAS Aerospace Engineering (MAE), Malaysia Airlines' (MAS MK, Sell, TP: RM2.21)maintenance, repair and overhaul arm (MRO), has sealed a three year maintenance support agreement with India's low-cost carrier SpiceJet for its fleet arm Boeing 737 New generation series aircraft. No value was given for the contract. SpiceJet's current fleet of 19 aircraft and
future aircraft will be sent to MAE for "C" and "D" checks from 2010 until 2013. "C" and "D" checks are periodic checks that all aircraft have to go through after a specific amount of flight hours (“C” checks could be out of service for 5-6 days whilst “D” checks could be out of service for a month). SpiceJet plans to add another 12 B737 NG aircraft to its fleet over the next 2
years. The deal will make SpiceJet MAE's first customer for its Indian joint-venture company. MAS-GMR Aerospace Engineering, MAE's 50:50 joint-venture company with GMR Hyderabad International Airport Ltd, is expected to start operations by 1Q11. Prior to the completion of MAS-GMR's facility at the Rajiv Gandhi International Airport in India, SpiceJet aircraft that
are due for checks will be serviced at MAE hangars in Subang, Selangor. MAE MD Mohd Roslan Ismail said the company is in advanced stages of discussions with other airlines like Jet Airways, but did not quantify the number of airlines it hopes to sign on this year. (BT)
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Malaysia Airlines Cargo Sdn Bhd (MASkargo), a subsidiary of Malaysian Airline System Bhd (MAS MK, Sell, TP: RM2.21) is eyeing a 10% to 15% revenue growth as it reviews its fleet composition and expands strategic cooperations this year. MASkargo MD Shahari Sulaiman said the cargo segment took a sudden turn upwards towards the end of 2009. He believes the industry will experience positive growth this year although it remains a challenging environment. He added that MASkargo is looking at growth of about 10% of their networks given the economic conditons. He also said MASkargo was working closely with China-based Hainan Airlines Group (HNA) to expand its presence in China, and specifically in Shanghai. MAS signed a strategic co-operation framework with HNA last October. The collaboration enabled
MASkargo access to HNA’s strong global network, increase its market share and thus allow the national carrier to have a wider presence worldwide. Shahari said MASkargo’s revenue could contribute up to 20% of the group’s revenue. He said cargo demand was expected to grow by some 7% to 37.7m tonnes this year following a 13% decline in 2009. Lastly, he said that
MASkargo was reviewing its fleet and may reduce the number of aircraft. It currently has four 747-200 and two 747-400 freighters. The lease of its two 747-400Fs will be expiring in April. (Financial Daily)
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The Securities Commission (SC) is looking into the submission of Petra Perdana Bhd (PETR MK, Sell, TP: RM1.21) executive director Shamsul Saad, purportedly relating to “breaches in procedures” over the sale of a block of Petra Energy Bhd shares belonging to Petra Perdana and also the sale of vessels by Petra Perdana to Petra Energy. The complaint comes in the wake of three major incidents that mark the totally divergent views of two groups of Petra Perdana shareholders – one led by executive chairman and CEO Tengku Datuk Ibrahim Petra ad the other by Shamsul Saad, and brothers Datuk Henry Kho Poh Eng and Kho Poh Wat, both senior general managers of Petra Perdana. On Dec 23, Shamsul obtained an injunction, which has been extended to March 3, to stop the sale of the remaining 29.59% in Petra Energy following an earlier sale of 25.05% or 48.8m shares to Shorefield Resources Sdn Bhd for RM1.91 per share. The divestment on piecemeal basis did not go well with some of the shareholders. The sale of three vessels by Petra Perdana to Petra Energy also represented a bone of contention. (StarBiz)
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Genting Singapore plc is ready to start operating Singapore’s first legal casino as soon as the government issues its gambling licence, the company said yesterday. Genting Singapore’s stock added as much as 4% on speculation gambling may begin at Resorts World Sentosa as soon as February’s Chinese New Year holiday. Four hotels and 10 restaurants within the US$4.5bn (RM15.03bn) Sentosa island complex would begin accepting guests from Jan 20. A Universal Studios theme park in the complex is also waiting for a licence to operate, and would open as soon as that is issued. The second casino resort, Marina Bay Sand, being built by Las Vegas Sands Corp, will open later after encountering construction delays. (Financial Daily)
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Dubai Group LLC, an investment firm of the Dubai ruler, is eyeing to sell its stake in Bank Islam Malaysia Bhd at an indicative RM1bn, marking the exit from its major investment in Malaysia. It is learnt that the proposed divestment, which had been mooted even before the Dubai debt crisis last year, would be completed by June this year as the unidentified buyer is now near completion of its due diligence, according to sources close to the negotiation. “The debt crisis in Dubai has, in some ways, put the sale on fast track,” the source said. Dubai Group presently owns about 30.5% stake after it opted out of a preference shares issuance exercise of Bank Islam, a unit of BIMB Holdings Bhd, as plans for the proposed divestment was already in place then. “There is a process running and we expect the sale to be done over the next few months,” Rothschild
Malaysia Sdn Bhd MD/CEO Piers Willis said. Rothschild is the sole financial advisor to Dubai Group. (Malaysian Reserve)
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An international marina, premium water-taxi service, upscale food and retail outlets and commanding views of the Andaman Sea are among the attractions property developer E&O Property Development Bhd will offer potential buyers at its RM1.8bn Quayside Seafront Resort Condominum development in Penang next month. The company's general manager (sales and marketing) Lim Hooi Yen yesterday said the luxury condominium project - which is part of E&O's Seri Tanjung Pinang waterfront development - will also boast the region's first private waterpark within a gated community. The Quayside condominiums, which comprise 7 blocks of seafront units, will be sprawled on a 8.4ha site, with 1.8ha of land dedicated to a signature waterpark and clubhouse. Lim said the proposed project is expected to be completed in about 7 to 10 years and about 60% of the total 1,200 Quayside condominium units are expected to be sold to Malaysians. (BT)
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Petronas Dagangan Bhd has launched a newly enhanced RON 97 fuel, the Petronas Primax 97, which offers motorists more power, better acceleration and fuel economy benefits. Petronas said yesterday the new fuel is now available at more than 300 of its 900 stations nationwide. (BT)
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The board of Ho Hup Construction Co Bhd has rejected an alternative regularisation plan proposed by former MD Datuk Low Tuck Choy, saying it will further constrain cashflow and fail to lift the company out of Practice Note 17 (PN17) status. In a statement released to Bursa Malaysia, Ho Hup said Low’s alternative plan did not clearly address the group’saccumulated losses, nor did it provide certainty that such losses would be substantially eliminated immediately upon the plan’s completion. Low’s plan was unveiled two weeks ago. (Financial Daily)
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Bank Negara Malaysia is in the process of formulating a new blueprint for the financial sector for the next decade which would ensure the development of a more inclusive financial system. Bank Negara governor Tan Sri Dr Zeti Akhtar Aziz said Malaysia will ensure that all segments of society continue to have access to financial services. The financial inclusion measures have seen positive results so far, with the country having among the highest level of deposit and loan accounts in the world. Zeti said the strategies implemented had generated 6 characteristics of the financial system, firstly a business environment that allowed a diverse range of financial service providers. Secondly, basic banking products and services have been made available at reasonable costs, and thirdly a diverse set of delivery channels had been introduced to ensure
widespread access to financial services. "The central bank's branching policy has encouraged financial institutions to establish an extensive branch network across the country to ensure widespread physical access to financial services." Another feature of the system is the enhancement of financial literacy and protection of consumer rights. Finally, recognising the importance of human capital development in the industry, the central bank also established centres of excellence for learning for the financial services sector. (BT)