SCOMI ... Jul10

Shareholding of Scomi Group as at May 2010
Kaspadu (including indirect): 15.21%
Axa Investment: 5.35%
EPF: 0%

Shareholding of Scomi Marine as at April 2010
Scomi Group: 52.71%
LTH: 5.11%
Chuan Hup Holdings Bhd: 23.19%
Meer Sadik Habib: 5.84%

Shareholding of Scomi Engineering as at April 2010
Scomi Group: 69.31%

What’s Up? … dated July 2010

Sources say its major shareholder Kaspadu Sdn Bhd is poised to loosen its grip on or even exit from the company. In an exercise that will see a realignment of shareholding at Kaspadu level, it is learnt that Datuk Kamaluddin Badawi will cased to be a substantial shareholder in Scomi but his partner Shah Hakim will remain with the group.

This is why Kaspadu has reduced its shareholding in Scomi by more than half from a year ago (2009). It is not known who bought the shares. Sources say the shares were sold to friendly with Kaspadu. Shah and his partners are still very much in control

In 2003, Kamaluddin had a 36.25% stake in Kaspadu, Shah hakim 36.25% and Nazimah Syed Majid 27.5%. It is understood that under the realignment, Shah Hakim is keeping his interest in Kaspadu while Kamaluddin and Nazimah are selling their stakes, But it is not clear to whom Kamaluddin and Nazimah have sold their shares.

It is uncertain whether the restructuring at Kaspadu level has any link to the events that occurred more than a year ago (2009), whne Scomi came under the spotlight following reports of US sanctions against Shah hakim and several other Malaysian businessmen who were allegedly involved in nuclear proliferation. .

Also, it is believed that Kamaluddin has been keen to exit Scomi.

It is worth nothing that Kaspadu had sold its Scomi shares at 35 sen to 50 sen apiece which is at a 50% to 70% discount to Scomi’s NTA per share of RM1.05. Given the fact that Scomi is undervalued, the divestment at such prices is quite puzzling, especially by a major shareholder. Furthermore, Scomi is main beneficiary of the potential cash dividends that will be declared by its subsidiaries.

Scomi is considered undervalued based on a sum of parts valuation of its subsidiaries, Scomi’s 69.31% stake in Scomi Engineering and 42.71% in Scomi Marine are worth RM475 million. If strip out the RM475 million from current market cap, the group would only be valued at RM35.6 million.

It is worth nothing that Scomi is the largest recipient of cash from its subsidiaries that have been divesting.