Tuesday, November 16, 2010

Kencana ... Nov10


Apart from talk that the outcome of two huge projects will be announced soon, it has been said that the company may see a new shareholder in the form of an international oil and gas player.
The latest speculation surrounding the company is that US based McDermott Intl Inc is looking to buy up to 5% of group CEO Datuk Mokhzani’s stake in Kencana. However he has firmly denied the speculation. However he said they are looking at the possibility of a placement which has been approved by its shareholder. It is always talking to people about JV and partnerships.

He also says the company is looking at raising funds for its expansion plans, but he declines to comment on what avenues are being considered.

According to sources, McDermott is willing to offer as much as 6 times price to book value for a stake in Kencana. It could not be ascertain whether McDermott could end up taking a portion of the shares that Kencana is offering in its impending placement.

The entry of McDermott would be seen as a strategic alliance for the O&G company. Kencana, which has expressed a desire to move up the value chain, would be able to leverage on McDermott’s expertise as it also has experience in fabrication in the energy and power industries worldwide.

At present, Kencana’s major shareholders are Mokhzani’s private vehicle Khasera Baru Sdn BHd with a 38.1% stake, followed by the EPF with 8.2% stake and non independent executive director Chong hin Loon with a 5.8% stake.

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