Scomi Marine sells 5 overseas assets for RM550m

Scomi Marine Bhd (7045) is selling its entire 100 per cent stake each in four overseas subsidiaries and 94.9 per cent in another foreign firm, all dealing in coal transportation sector, for a total of RM550 million. 
 
The deal announced yesterday will also see Scomi Marine substantially diluting its stake in 80.54 per cent-owned PT Rig Tenders Indonesia Tbk (PT Rig) to less than one third.
In return, PT Rig will have a new controlling shareholder in Portside Offshore Inc, owned by a private fund in Indonesia.

The exercise will see Scomi Marine repositioning itself to become a well-capitalised marine logistics player to tap growth opportunities in emerging markets, its president Mukhnizam Mahmud said in a statement yesterday.

It is learnt that Scomi Marine plans to pare down its debt from the RM550 million proceeds.
The company may also consider giving out a special dividend and invest in new business opportunities.

The five subsidiaries are CH Logistics Ltd, CH Ship Management Pte Ltd, Goldship Pte Ltd, Sea Master Pte Ltd and PT Batuah Abadi Lines.

They will first be sold to PT Rig for an aggregate sum of US$171.8 million (RM549.76 million), according to the Scomi Marine statement.

PT Rig will pay for the acquisitions via a renounceable rights issue involving 1.3 billion to 1.8 billion shares.

Scomi Marine will renounce its entitlement to the rights shares, which will subsequently reduce its PT Rig stake to between 20.63 per cent and 24.55 per cent.

Mukhnizam said the disposals are both strategic and timely.

The marine logistics and offshore support vessels businesses in Indonesia have become increasingly challenging given the intensifying competition, changes to local regulations relating to ownership and cabotage as well as pressures on charter rates.

"We recognise the need for a strategic investor (Portside Offshore) that can play an integral role in growing our business," Mukhnizam added.

Scomi Marine has identified India as a key focus among its targeted emerging markets for high-growth opportunities.

The company, however, remains bullish on the Indonesian market as its coal production sector is expected to expand, thus increasing the need for marine logistics services.

"We have selected to dispose of our existing assets today (Monday) so that we can participate and harvest greater rewards in a bigger, stronger entity in the foreseeable future," Mukhnizam noted.

By Zuraimi Abdullah

Business Times