KUALA LUMPUR (Jan 25): GENTING BHD []’s share price slipped on Wednesday as investors decided to take some profit and also on news that it sold its oil and gas business in Indonesia.
At 3.24pm, Genting was down eight sen to RM10.90. There were 1.46 million shares done at prices ranging from RM10.78 to RM11.02.
Genting announced to Bursa Malaysia on Wednesday it was exiting its Natuna oil and gas (O&G) business in Indonesia after its 95% subsidiary Swallow Creek Ltd sold all its interests to Australia’s AWE Ltd for US$39 million cash.
Swallow Creek was disposing of its 100% stake each in Genting Oil Natuna Pte Ltd (GONPL) and Sanyen Oil & Gas Pte Ltd (SOGPL) for US$39 million.
Under the deal, Swallow Creek would also assign loans and receivables owed to the company by GONPL and SOGPL of US$100 million to AWE – which is an Australian oil and gas exploration and production company.
RHB Research Institute said the sale was positive for Genting. It added that Genting had been looking to sell its O&G production sharing contracts for a while, as developing the oil fields would require a lot of capex. AWE said that to develop the projects would require an investment of A$600 million (RM1.9 billion).
“As we had not projected any earnings from the O&G division, given that all the projects are still in exploration stage, there is no impact on earnings. However, Genting is likely to register an EI gain from the sale.
“Our SOP-based fair value is maintained at RM12.05, which has taken into account the recently-raised fair value for Genting PLANTATION []s. We continue to rate Genting an Outperform, being one of cheapest gaming stocks in the region which gives investors exposure to both the stable Malaysian and flourishing Singaporean markets,” said RHB Research.
At 3.24pm, Genting was down eight sen to RM10.90. There were 1.46 million shares done at prices ranging from RM10.78 to RM11.02.
Genting announced to Bursa Malaysia on Wednesday it was exiting its Natuna oil and gas (O&G) business in Indonesia after its 95% subsidiary Swallow Creek Ltd sold all its interests to Australia’s AWE Ltd for US$39 million cash.
Swallow Creek was disposing of its 100% stake each in Genting Oil Natuna Pte Ltd (GONPL) and Sanyen Oil & Gas Pte Ltd (SOGPL) for US$39 million.
Under the deal, Swallow Creek would also assign loans and receivables owed to the company by GONPL and SOGPL of US$100 million to AWE – which is an Australian oil and gas exploration and production company.
RHB Research Institute said the sale was positive for Genting. It added that Genting had been looking to sell its O&G production sharing contracts for a while, as developing the oil fields would require a lot of capex. AWE said that to develop the projects would require an investment of A$600 million (RM1.9 billion).
“As we had not projected any earnings from the O&G division, given that all the projects are still in exploration stage, there is no impact on earnings. However, Genting is likely to register an EI gain from the sale.
“Our SOP-based fair value is maintained at RM12.05, which has taken into account the recently-raised fair value for Genting PLANTATION []s. We continue to rate Genting an Outperform, being one of cheapest gaming stocks in the region which gives investors exposure to both the stable Malaysian and flourishing Singaporean markets,” said RHB Research.
