Firm also looking at expanding Indonesian coal shipping business
KUALA LUMPUR: Scomi Marine Bhd may undertake a capital repayment exercise following the huge gains made from the disposal of its Indonesian coal shipping assets, which boosted its net cash to RM552mil.
The company, however, is also looking at other options which include investing in larger vessels to expand its coal shipping business in Indonesia beyond South-East Asia or an entirely new business direction, said a source.
“Upon the completion of the disposal, the board will have an action plan,” said the source.
Scomi Marine on Monday announced the sale of a controlling equity in its marine logistics business headlined by PT Rig Tenders Indonesia TBK to Portside Offshore Inc (POI), a company that is controlled by an Indonesian private fund.
Scomi Marine will end up with a minority stake of between 20.63% and 24.55% in Rig Tenders after the sale to POI is concluded.
The sale of its Indonesian coal shipping business would see the former major contributing company of Scomi Marine reduced to an associate company but the company sees that situation as having a small slice of a much bigger pie.
The owner of POI is said to also own a mine and has a business that handles about 80,000 tonnes of coal barging a year and that is set to grow as more power in Indonesia is generated from coal in the future.
“The outlook for marine logistics business in Indonesia is bright, and all it needs is the right partner that has the financial muscle and connections to explore further other business segments along the supply value chain like the coal bulk terminal, and bigger vessels such as panamax to cater for the export markets,” said TA Research in a report yesterday.
“We believe Scomi Marine, together with its new joint venture partner, may look into this in due time.”
Scomi Marine has a debt of RM70.8mil after disposing its marine logistics business. After paying that off, the company would have a sizeable hoard to pursue new opportunities, which might include the purchase of panamax for shipping coal to countries such as China or India where demand for that commodity is on the rise.
Investing the money back in the Indonesian coal handling facilities along with its new partner was another option along with a capital repayment to shareholders, said analysts. “Paying a dividend is something the Scomi shareholders will want,” said a source.
Options for how that cash can be used within the group are plenty given the diversity of the group. That cash could be used to fund expansion in the rail services, oil and gas and even marine logistics into the big markets in Asia.
By JAGDEV SINGH SIDHU
jagdev@thestar.com.my
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