KUALA LUMPUR (Feb 3): CIMB Equities Research said the Asia Petroleum Hub (APH) has taken a positive twist as a CIMB Bank-led restructuring is reportedly in the works.
The research house said on Friday that if successful, it would bring in the additional funds needed to complete the project.
“For Muhibbah, it would mean no provisions and possibly, additional APH works. We raise EPS and RNAV for a recent project award. Our target price goes up from RM1.24 to RM1.63 as we narrow our RNAV discount from 50% to 40%.
“We upgrade from Hold to Trading Buy given the possibility of a favourable outcome for APH in the next one to two months,” it said.
On Thursday, Singapore’s Straits Times reported that APH was set to get a financial lifeline from a consortium led by its main banker, CIMB Bank. CIMB has lent more than RM800 million to APH.
Local bankers involved in the restructuring of APH said that protracted shareholding disputes which hobbled the project have been resolved and CIMB has committed to providing the necessary funding to complete the project.
The news report said as part of the settlement hammered out in recent days, APH’s current shareholders have agreed to surrender their equity holdings.
It is unclear if they received any financial compensation. The project is about two-thirds completed and the new consortium hopes to finish it within 18 months.
The news report quoted a banker as saying that taking over a project for a bank is a little out of the box, but this is a very viable business and there is no reason why CIMB shouldn't own it as a major investment.
The research house said on Friday that if successful, it would bring in the additional funds needed to complete the project.
“For Muhibbah, it would mean no provisions and possibly, additional APH works. We raise EPS and RNAV for a recent project award. Our target price goes up from RM1.24 to RM1.63 as we narrow our RNAV discount from 50% to 40%.
“We upgrade from Hold to Trading Buy given the possibility of a favourable outcome for APH in the next one to two months,” it said.
On Thursday, Singapore’s Straits Times reported that APH was set to get a financial lifeline from a consortium led by its main banker, CIMB Bank. CIMB has lent more than RM800 million to APH.
Local bankers involved in the restructuring of APH said that protracted shareholding disputes which hobbled the project have been resolved and CIMB has committed to providing the necessary funding to complete the project.
The news report said as part of the settlement hammered out in recent days, APH’s current shareholders have agreed to surrender their equity holdings.
It is unclear if they received any financial compensation. The project is about two-thirds completed and the new consortium hopes to finish it within 18 months.
The news report quoted a banker as saying that taking over a project for a bank is a little out of the box, but this is a very viable business and there is no reason why CIMB shouldn't own it as a major investment.
