FBMKLCI 1588.58 DJ -151.44 CRUDE OIL 95.03 RM 2.9710

Two local oil and gas (O&G) service providers, SapuraCrest Petroleum Bhd and Kencana Petroleum Bhd, are set to merge and become the largest O&G service provider by asset size in the country, allowing it to undertake larger and more complex projects in a proposed deal valued at RM11.85bil. Both companies announced yesterday they received offer letters from special-purpose vehicle (SPV) Integral Key Sdn Bhd (IKSB) to buy up the assets and liabilities of both companies, to be paid for in cash and new shares in the new merged entity. Both SapuraCrest and Kencana will then distribute the cash and IKSB shares they receive, back to their shareholders. This will result in the current shareholders of SapuraCrest and Kencana owning shares in IKSB.

KPJ Healthcare Bhd’s wholly-owned subsidiary Kumpulan Perubatan (Johor) Sdn Bhd (KPJSB) has signed a joint venture deal with Yayasan Islam Perlis (YIP) to build and operate a hospital on a leasehold 4.33 acres in Kangar. The private healthcare facility will be known as KPJ Perlis Specialist Hospital.

Silk Holdings Bhd has secured four long term contracts worth a total of RM39.75mil from Petronas Carigali Sdn for the provision of four units of anchor handling tug supply vessel (AHTSV). Silk Holding said the contracts would not materially affect the results of Silk for the financial year ending July 31 but was expected to contribute positively to its earnings and assets for the financial year ending July 31, 2012.

Securities of Sunway Holdings Bhd and Sunway City Bhd (SunCity) will be suspended for trading from Aug 2 until the removal of both companies from the official list of Bursa Securities.  Both companies’ shareholders had agreed at an EGM last month to a proposal that would see a new company (newco) called Sunway Sdn Bhd take over Sunway and SunCity in a RM4.5bil deal via cash and share swaps.vNewco proposed to take over Sunway Holdings for RM2.60 a share and SunCity at RM5.10 a share, as well as buy Sunway Holdings and SunCity warrants at RM1.50 and RM1.29 respectively. Under the deal, new shares in newco will be issued, valued at RM2.80 per share. The newco will merge the assets and liabilities of Sunway and SunCity. A new Sunway entity is expected to be listed on the Main Market of Bursa Malaysia in the third quarter of this year.

Inari Bhd, which is en route to a listing on the ACE Market of Bursa Malaysia on July 19, had its initial public offering (IPO) oversubscribed by 10.42 times. At an issue price of 38 sen per share, Inari's IPO raised RM31.54mil in proceeds for the group. About RM17.5mil from the proceeds will be allocated for capital expenditure, including the building of a new assembly and manufacturing facility in Penang which is due to be completed in the first quarter of 2012.

Bumi Armada Bhd’s institutional price under its initial public offering (IPO) was fixed at RM3.03 per share after the completion of the bookbuilding process. In a Bursa Malaysia filing yesterday, the offshore oil and gas services provider stated that the final retail price was fixed at RM3.03 per share. The company will refund the 12 sen difference between the final retail price and the retail price of RM3.15 per issue share, within 10 market days from the date of the final ballot of the applications. The retail offering closed on July 7.