Ebworx ... Mar12

Ebworx Bhd has received a takeover offer from Hitachi Ltd to buy all of its shares at 90 sen per share which is conditional of a minimum level of acceptances of 85% of the nominal value of its shares, excluding the treasury shares held by Ebworx.

Having deliberated on the contents of the letter, the board has agreed for the potential buyer to proceed with the due diligence (to the extent permitted by applicable laws and regulations) on the company (Ebworx).

As the Malaysian financial services sector grows its regional and digital footprints, banking solutions provider eBworx has been purusing growth by riding on the sector’s dynamics.

Its client base include almost all the local banks as well as those in Singapore, Indonesia, China , Thailand and the Philippines.

The software requirements of financial service providers change as and when central banks tweak regulatory guidelines. The impending implementing of the Basel III global regulatory standards will also require banks to revaluate their internal frameworks.

Recurring income now makes up about 70% of eBworx’s top line after the group reoriented its business strategy away from one off software licensing sales.

Its order book stood at rm60 million. Its cash and bank balance stood at rm35.2 million.

Its three largest shareholder collectively control about 70.69% stake in the company. Tan holds 16.12%, CSE-Infotech Ltd and OSK Ventures Intl Bhd’s unit OSK Capital Partners Sdn Bhd own 29.21% and 25.36% equity interest.

By building its regional presence, its future focus will be on growing its presence in Singapore, Indonesia and China.

For the past five years, more than 80% of its revenue comes from its exiting customers.

KUB ... Mar12

Sources say KUB is said to have been successful in its bid for Shell LPG business in Malaysia, held under its listed arm Shell Refining Co.

According to sources, KUB was willing to pay between rm300 million and rm350 million for Shell’s Malaysian PLG business.

Nonetheless, based on rm50 million pre tax profits, a value of rm300 million to rm350 million for the LPG business would mena a minimum of six times earnings. When Shell sold its Singapore LPG business, it was at 10 times earnings.

Shell has been gradually disposing of its LPG business globally. Given that the LPG business deals mostly in cash, the division had contributed to Shell Malaysia’s cash pile.

On the flipside, Shell’s LPG business would help to provide a boost and give anchor to the KUB group, which is currently in the red.

Obtaining Shell’s LPG business would help turn KUB’s energy division around. In terms of top line contribution, the energy business accounted for 59.3% of revenue for FY2011 ended Dec 31.

KUB’s LPG business is not considered as one of the company’s core segments. However KUB had stated previously that if it managed to obtain Shell’s local LPG business, then the company would work on reshuffling its portfolio.

KUB already appears to be undergoing an internal organization judging by the slew of announcements concerning changes to the board.

The new management setup at KUB and its prospect of securing Shell’s local LPG assets are certainly worth watching.

It is UMNO linked holds a 29.6% stake while the Ministry of Finance owns a 22.5% stake.

Tenaga ... Mar12

It is expected to perform better in the current second quarter ended Feb 2012 due to higher average gas supply from Petronas as well as the RM2bil compensation as part of fuel cost-sharing mechanism.

It has been giving an average 1,100 million metric standard cu ft per day (mmscfd) and its requirement is 1,250 mmscfd. It still need to burn distillates and oil from time to time but burn less of this.

TNB's financial performance would be better, given that it burned less distillates and oil, which was five times more expensive. Previously TNB incurred an additional RM400mil a month to replace the shortfall in gas but the amount would be lower now (Feb 2012).

TNB was expected to record profit once more in the second quarter once it booked the RM1bil that it had received from the Government under the fuel cost sharing mechanism between the Government, TNB and Petronas. TNB reported its third consecutive net loss of RM224.7mil in its first quarter to Nov 30, 2011, against its preceding quarter net loss of RM453.9mil.

TNB had received fully the compensation and would now be able to write-back RM2bil from Petronas and the Government. However, the compensation of RM2bil was only up to October 2011. The three major stakeholders TNB, Petronas and the Government had agreed to share the RM3bil incurred between January 2010 and October 2011.

It still have to burn distillates and oil after October 2011 and are still discussing with the Government on further compensation.

Muhibbah ... Mar12

Its turnaround is likely anchored by APH and project wins. Its outstanding order book stands at rm3.1 billion of which construction/infra jobs make up some rm2.5 billion. This should last till 2014. Estimate of rm1 billion worth of new contracts in 2012. The key drivers are potential MRT packages and marine/port related jobs, both local and overseas. The restructuring of the APH project is still on the cards and expect some news flow on the progress in the next three to four months (from March 2012).

For Muhibbah, which is the main contractor for APH, a resolution could lead to a stake in APH and additional job scope from the balance of works.

As one of the contractors for the rm1.4 billion bunkering island project in Johor, has a filed a suit against the promoter, APH and the MD contractor, ZAQ Sdn Bhd for overdue claims amounting to rm381 million.

If the court proceedings are successful, it will have a positive impact on the company. Muhibbah is among the leading contractors for the project undertaken by APH. The project has been saddled by cost overruns and delays, prompting its lead financier, CIMB to stop the line of credit.

In Dec 2011, CIMB managed to get a court order to appoint receivers and managers on APH. Following that, there were reports of CIMB and Muhibbah possibly converting the amount due into equity and taking over the project in an effort to restructure APH. However, it is learnt that not all the creditors of APH are keen to convert their debt into equity which may stall the restructuring of APH. For the restructuring to go through, it needs 75% creditors’ support.

I'm Back!

Take a break until further notice!