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.

FBMKLCI 1514.25 DJ-22.71 CRUDE OIL103.66 RM 2.9970

Boustead Holdings Bhd has proposed to pay RM100mil for a controlling stake in MHS Aviation Bhd, which has secured a RM3.1bil contract from Petronas Carigali to provide rotary wing aircraft, equipment and services.

Jaya Tiasa’s net profit rose 191% to RM39.89 million in the third quarter ended Jan 31, 2011 from RM13.67 million a year ago, boosted by higher prices for its timber and palm oil. Revenue rose 13.3% to RM237.64 million from RM209.68 million while earnings per share were 14.94 sen compared with 5.12 sen. Jaya Tiasa said the better results in revenue and pre-tax profit were mainly due to higher profit margin from logs sales with 36% increase in average selling price and 50 % increase in fresh fruit bunch (FFB) sales volume with 61 % improvement in average selling price. It said for the nine months, net profit jumped 425% to RM92.42 million from RM17.59 million while revenue rose 10.6% to RM615.39 million from RM556.38 million.

Silk Holdings Bhd registered a loss after tax and minority interest of RM3.2mil for the second quarter ended Jan 31 compared with profit after-tax and minority interest of RM970,000 recorded in the previous corresponding quarter.

SapuraCrest Petroleum Bhd posted a net profit of RM72.7mil for the fourth quarter ended Jan 31, which was 79.1% higher than RM40.6mil recorded in the same period last year.

BHIC’s associate Boustead Naval Shipyard Sdn Bhd (BNS) has been served with a writ of summons by Meridien Shore Sdn Bhd which is claiming RM49.5 million in losses. Meridien, which is in liquidation, was claiming RM49.57 million as specific damages, interest at 8% per annum, general damages, cost and other relief over the alleged losses suffered after Bank Kerjasama Rakyat Malaysia Bhd foreclosed on several parcels of its land in Johor.

Cypark Resources reported net profit of RM6.55 million in the first quarter ended Jan 31, 2011 on the back of RM42.61 million in revenue and expects to ride on the growing renewable energy business. Earnings per share were five sen When compared to the previous quarter, it said the revenue rose by 17% to RM42.61 million mainly due to the smooth progress of phase two of its projects. However, the 1Q gross profit margin fell 10.7% to 26.1% due to lower margins from engineering works. It said it planned to venture into the renewable energy business. The proposed renewable energy park project in Pajam would harness the potential resources at the landfill. The solar, landfill gas (biogas) and waste (biocell) would enable it to tap into scalable renewable energy which would generate up 10 MW.