Leader Universal disposes 15.4% stake in Sarawak Cable to HNG Capital

KUALA LUMPUR (May 7): Wire and cable producer, Leader Universal Holding Bhd disposes of its entire 15.4% stake in Sarawak Cable Bhd to HNG Capital Sdn Bhd (HNGC) as part of the latter's takeover of the group.

In a statement on Bursa Malaysia on Monday, the group said it and HNGC had mutually agreed to the disposal of its stake in Sarawak Cable and had completed it on Monday in accordance with the terms and conditions of the sales of business agreement (SBA) between the two companies.

Earlier today, theedgemalaysia.com reported that some 20.74 million shares or a 15.4% stake in Sarawak Cable had been traded off-market on Monday morning.

The tranche worth RM35.3 million was done in an off market cross trade at RM1.71 per share, which was a 10.5% discount to its current market price of RM1.91.

In October 2011, Leader Universal's top officials, via HNG Capital made a takeover offer for the group for RM480.10 million or RM1.10 per share.

It said the purchase consideration would be RM410.94 million in cash and RM69316 million as an amount remaining due and owing HNGC as a debt due to Leader.



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15% stake of Sarawak Cable done off-market

KUALA LUMPUR (May 7): Some 20.74 million shares or a 15.4% stake in Sarawak Cable Bhd were traded off-market on Monday morning.

The tranche worth RM35.3 million was done in an off market cross trade at RM1.71 per share, which is a 10.5% discount to its current market price of RM1.91.

As at 3pm, no Sarawak Cable shares had been traded on the open market today.

It is believed that the shares were disposed by Leaders Universal Holdings Bhd. According to the latest Bursa filing, Leader Universal holds a 15.4% stake in Sarawak Cable.



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Sarawak Cable to go ahead with transmission line projects

KUALA LUMPUR (Feb 21): Sarawak Cable Bhd will go ahead with its plans to take part in the transmission line projects in Sarawak.

The company said on Tuesday the termination of the MoU with Sinohydro Corporation (M) Sdn. Bhd. and KEC International Ltd last week would not have any impact on its earnings per share and net asset per share.

On Feb 17, Sarawak Cable said the three parties had decided not to pursue the MoU which was to jointly prepare and submit proposals for building transmission lines in Sarawak.

“As the parties to the MOU will not be submitting the proposals together, the MoU is thereby terminated,” it had then said.



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Stocks to watch: Shell, MMC, Sarawak Cable, Wing Tai

KUALA LUMPUR (Feb 18): Stocks on Bursa Malaysia could advance on Monday, Feb 20 following positive developments in Greece and China’s move to shore up the slowing economy.

Reuters reported late Saturday that Greece's cabinet tackled on Saturday how to implement austerity demanded by the EU and IMF as a 130-billion-euro (US $171-billion) rescue seemed within reach, while the euro zone considered modifying a deal with private creditors to help Athens reduce its huge debts.

In another development, China's central bank cut the amount of cash that commercial lenders must hold as reserves on Saturday for the second time in nearly three months, the latest step to shore up the slowing economy.

The People's Bank of China (PBOC) delivered a 50-basis-point cut in banks' reserve requirement ratio (RRR), effective from next Friday, Feb. 24, after repeatedly defying market expectations for such a move.

At Bursa Malaysia, stocks to watch include Shell Refining Company (Federation of Malaysia) Bhd, MMC CORPORATION BHD [], Sarawak Cable Bhd and Wing Tai Malaysia Bhd.

Shell Refining posted net losses of RM99.49 million in the fourth quarter ended Dec 31, 2011 compared to the net profit of RM114.66 million a year ago.

Shell attributed the losses due to weak refining margins which had also impacted the FY11 results, where it reported net losses of RM125.74 million.

MMC said on Friday the listing of its 41.8% owned Gas Malaysia Bhd on the Main Market of Bursa Malaysia Securities was delayed to the second quarter of 2012.

MMC said Gas Malaysia was “still in the midst of complying with the conditions imposed by the Securities Commission”.

Sarawak Cable has scrapped the MoU with Sinohydro Corporation (M) Sdn Bhd and KEC International Ltd to develop transmission lines in Sarawak.

This latest development could possibly see Sarawak Cable going alone to undertake the project.

On Aug 17, 2011, the three parties had signed the MoU to prepare and submit proposals for the project.

Meanwhile, Wing Tai Malaysia Bhd saw its major shareholder increasing its stake to 61.07% or 191.218 million shares with the recent acquisition of 2.20 million shares on Feb 17.

The Edge Malaysia reports that Century Logistics ahs put the FSU setback behind it. The service provider is confident of matching its 2010 record performance this year despite a minor setback with its floating storage units in 2H2011.

S P Setia Bhd reported that the Securities Commission has declined a ruling application sought by the joint offerors of S P Setia – Permodalan Nasional Bhd and S P Setia president and CEO Tan Sri Liew Kee Sin.

The joint offerors had decided not to appeal. However, the decision would not impact the joint offer.



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Sarawak Cable ends MoU for transmission lines plan

KUALA LUMPUR (Feb 17): Sarawak Cable Bhd scrapped the plan to work with Sinohydro Corporation (M) Sdn Bhd and KEC International Ltd to develop transmission lines in Sarawak.

The company said on Friday the memorandum of understanding (MoU) had been terminated and the parties would not be submitting the proposal.

On Aug 17, 2011, the three parties had signed the MoU to prepare and submit proposals for the project.



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Sarawak Cable a power play with strategic positioning

Sarawak Cable Bhd (Nov 21, RM2.00)
Maintain buy at RM2.05 with fair value of RM2.86: Maintain “buy” on Sarawak Cable (SCB) with an unchanged sum-of-parts-derived fair value of RM2.86 target price-earnings ratio of 9.6 times on FY12F earnings per share. Investor interest is increasing on the group’s deepening status as a direct play on Sarawak Energy Bhd’s (SEB) robust spending.

SCB is confident of securing a role in the upcoming 500kV transmission line spanning over 600km that links Bunut to Kuching in Sarawak. This is more so after it inked several memorandums of understanding with multinational power giants such as Sinohydro India’s KEC International Ltd and Siemens to solidify its bidding opportunities in power transmission contracts.

The Edge weekly revealed over the weekend that the pre-qualification stage of this massive backbone transmission line project worth about RM1.5 billion is more or less finalised. We understand that SCB is the only home contractor that has been shortlisted under a strict screening process by SEB.

End contracts for transmission line works could be out by this January. This should quickly be followed by substation works worth over RM1 billion.

We reckon that SCB’s competitive edge lies with its status as the only integrated transmission line specialist, particularly in the supply of power cables.

The group would also have more local knowledge (logistics, mobilisation and dealings with locals) than its international peers.

Beyond the 500kV line, SCB foresees an acceleration of transmission line jobs in Sarawak, including the Kuching-Kalimantan line, Miri-Baram line as well as linkages to Brunei. Near-term, it is close to securing a transmission line job within the Samalaju Industrial Park.

The group has also set aside some RM80 million to further its plans to develop mini-hydropower plants in Indonesia via a 65% stake in PT Inpola Mitra Elektrindo. Construction is scheduled to start by year-end.

We expect SCB to register strong earnings growth for its upcoming 3QFY11 results, scheduled to be out this week. This is even before any maiden contributions from its proposed acquisition of Trenergy Infrastructure Sdn Bhd, which is scheduled for completion by next month. — AmResearch, Nov 21


This article appeared in The Edge Financial Daily, November 22, 2011.



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