Cimb News

Shipping giant MISC Bhd and oil and gas services provider Bumi Armada Bhd are said to be in merger talk involving the consolidation of the floating production storage offshore (FPSO) businesses of both companies, say local media reports. Petroliam Nasional Bhd (Petronas) owns 62.67% in MISC. As such, investors could be anticipating that Bumi Armada may win Petronas contracts if a deal materialises. If it materialises the consolidation in the FPSO sector will also create a giant in the business. According to news reports, MISC may sell its FPSO business to Bumi Armada in exchange for Bumi Armada shares. Bumi Armada, which is controlled by tycoon T. Ananda Krishnan is the world’s fifth largest FPSO operator, with nine FPSO vessels.

Singapore shares edged lower on Monday, dragged down by losses in Sembcorp Marine Ltd which hit a six-week low after posting lower-than-expected first-quarter earnings. The benchmark Straits Times Index was down 0.2 percent at 3,245.69 by 0506 GMT. MSCI's broadest index of Asia-Pacific shares outside Japan dipped 0.3 percent. Shares of Sembcorp Marine fell 2.5 percent to an intra-day low of S$3.96, their lowest since March 21, after the offshore drilling rig builder posted a 3.1 percent increase in first-quarter net profit, which nonetheless undershot market expectations. CIMB downgraded its rating on Sembcorp Marine to "hold" and cut its target price to S$4.30 from S$5.10, citing a shortfall in ship repair and rig building revenue.

International law firm Watson, Farley & Williams Asia Practice LLP (WFW) said it advised a joint venture involving M3nergy and PT Transamudra as sponsors on a $182 million term facility and $38.4 million guarantee facility. The funds will finance the floating production, storage and offloading facility named FPSO Ratu Nusantara. The FPSO Ratu Nusantara is scheduled for operation by Petronas Carigali in the Bukit Tua oil and gas field in the Ketapang block, offshore Madura Island, East Java, Indonesia. Partner Andrew Nimmo led the WFW Asia Practice team for this deal, assisted by senior associate Shawn Er. M3nergy is an emerging exploration and production company headquartered in Malaysia.

Malaysia's Bintulu Port Holdings, which runs the nation's largest LNG port, plans to offer 100 million new shares to raise at least 400 million ringgit ($105.2 million) under its IPO. It was reported that 40 million of the shares will be offered to the public and 60 million will be placed with private investors who will include foreigners. The managing underwriter for Bintulu Port's listing, Commerce International Merchant Bankers (CIMB), is confident its IPO will be well received by investors. "The port itself is an attractive investment proposition," said a CIMB official. Bintulu port handled 23.6 million tons of cargo from the time it began operations in 1993 until last year. Of this amount, LNG accounted for 64 percent of its total throughput handled and 81.5 percent of total revenue.

According to reports, Titan Petrochemicals Group has completed the acquisition of a shipyard from its controlling shareholder. The transaction was priced at a significant valuation discount to other Chinese shipyards based on the current order book and expected future earnings, which suggests the injection should be very favorable to Titan. Part of the shipyard project – including the high-margin ship repair facility -is still at the development stage, however, which means the acquisition is not without risks. Acknowledging these risks, the payment has been structured to account for the fact that a lot of the earnings potential is based on what comes on stream in 2008-2010.