PNB finds buyer for Sime Darby's non-core assets

By Sharen Kaur
sharen@mediaprima.com.my
Published in NST on April 30, 2013

The fund manager has a 36.62 per cent stake in Sime Darby, one of the world's biggest oil palm planters.

PERMODALAN Nasional Bhd (PNB) has found a suitor to buy the non-core assets of Sime Darby Bhd, said its president and chief executive officer Hamad Kama Piah Che Othman.

He told Business Times after the closing of the Malaysia Unit Trust Week (MSAM) here on Saturday that an announcement will be made soon.

Last year, Prime Minister Datuk Seri Najib Razak had asked PNB and Khazanah Nasional Bhd to divest their stakes in non-core companies, such as FEC Cables, to Bumiputera companies via an open tender.

This is part of the government's plan to reduce its role in business and allow greater participation by the private sector.

PNB has four non-core assets left to divest, including those parked under Sime Darby.

Other non-core assets that PNB is looking to divest include U-Insurance Sdn Bhd, the insurance arm of UMW Holdings Bhd.

Hamad Kama Piah said PNB is looking at a few offers for the remaining three non-core assets and that announcements will be made between May and July. 

Just a week ago, Hamad Kama Piah said PNB has yet to find the right suitors to buy any of the four non-core assets.

Hamad Kama Piah had said the price offered by interested buyers did not meet PNB's target.

Meanwhile, he said the 14th MSAM here has exceeded expectations in terms of number of visitors and new account holders for unit trusts.

Some 240,000 visitors attended the event in the first eight days. Last year's event in Kota Kinabalu drew 250,000 visitors.

Since its inception in April 1999, MSAM has enabled PNB to grow its unit trust size to 164.1 billion units as at February 2013 from 29.3 billion.

Its number of unitholders swelled to 11.2 million in 2012 from 7.6 million in 1999. PNB also paid out RM11.3 billion in income distribution in 2012 from RM3.5 billion in 2000.

Companies under PNB that participated in the event included UMW, Sime Darby, Projek Lintasan Kota Holdings, Island & Peninsular, Chemical Co of Malaysia, NCB Holdings, Takaful Ikhlas, Malaysian Industrial Finance and Malayan Banking Bhd.

I&P plans luxury residential towers

By Sharen Kaur
sharen@mediaprima.com.my
Published in NST on April 30, 2013

I&P Group Sdn Bhd is hoping that its strategy of building luxury residential towers will lead to better results for the company.

Its group managing director Datuk Jamaludin Osman said its first project, which is worth RM800 million, will be launched in Bandar Kinrara, Puchong, Selangor, this year.

I&P, a wholly-owned unit of Permodalan Nasional Bhd, has 13 ongoing township projects and around 2,000ha landbank in the Klang Valley and Johor Baru.

These include Bandar Baru Sri Petaling, TemasyaGlenmarie, Bandar Kinrara, Alam Impian and Alam Damai in the Klang Valley, and Taman Industri Jaya, Taman Rinting and Taman Perling in Johor.
The residential component in these townships have always focused on landed properties and affordable apartments.

For the new project in Bandar Kinrara, Jamaludin said it will comprise five serviced apartment blocks totalling 1,200 units.

Speaking to Business Times in an interview recently, he said the company will be launching the first block, featuring 236 serviced apartments, within the next two months.

Each unit ranges from 642 square feett to 1,600 sq ft and will be priced at about RM650 per sq ft.

"This will be our first time embarking on high-rise luxury residential property projects. We are doing this to enhance the land value. We need better returns for a company that is growing," he said.

Jamaludin said besides Bandar Kinrara, the company will also be launching luxury serviced apartments in Bandar Baru Sri Petaling and Alam Damai.

I&P was formed in 2009 after the rationalisation exercise of three companies, namely Island & Peninsular Sdn Bhd, Petaling Garden Sdn Bhd and Pelangi Sdn Bhd.

For its fiscal year 2009, the company posted earnings of RM142.51 million on the back of RM1.07 billion revenue, translating into a profit margin of 13.28 per cent.

Last year, its revenue was around RM1.1 billion.

The company is expected to maintain that performance in the current year, Jamaludin said.

RM500m job for Lion Pacific

By Sharen Kaur
sharen@mediaprima.com.my
Published in NST on April 30, 2013

PRIVATELY held Lion Pacific Sdn Bhd is believed to have won a rail contract worth RM500 million to build a railway link in Subang, Selangor.

Business Times was told that Lion Pacific had won the job via a joint venture with Skypark Link Sdn Bhd and that engineering works have already started.

Rail consultant KL Consult Associates Sdn Bhd, on its website, lists Skypark Link as its client for the proposed Subang Jaya-Sri Subang-Subang Skypark Rail Link.

It is understood a tender has been called by KL Consult for the electromechanical portion of the contract. Some six firms had submitted bids, which are Siemens Malaysia, E to E Engineering from India, Intelligent Essence Sdn Bhd, Global Rail Sdn Bhd, Pestech Sdn Bhd and CMCE Sdn Bhd.

The Skypark Link-Lion Pacific venture (Slip) received the letter of award from the Transport Ministry early this year.

The project, which is slated for completion by 2015, is the first of a three-phase contract.

The plan is for Slip to lay 8.5km of new double-tracking railway line on the existing KTM alignment from the KTMB station in Subang Jaya right up to Sri Subang, as well as to construct a new elevated alignment near the roundabout leading to the carpark area opposite the Subang Skypark Airport Terminal.

The rail project comes under the private financing initiative (PFI) programme, which seeks to transfer responsibility of financing and managing capital investment of public sector assets to the private sector.

The PFI initiative was first announced under the Ninth Malaysia Plan in March 2006. Although, the project is placed under the PFI category, the government has allocated some RM125 million, if required, to help jump-start the project.

This is the second major rail contract over the past nine months won by Lion Pacific, which was active in the railway industry more than a decade ago. Little was heard of it since then, only emerging in the public eye in July by notching a contract valued just under RM1 billion.

Last July, Syarikat Prasarana Negara Bhd announced that the Lion Pacific-George Kent Bhd joint venture had won a RM955.84 million contract for the system works for the Ampang light rail transit line extension project.

George Kent is a public-listed company controlled by husband-and-wife team of Tan Sri Tan Kay Hock and Puan Sri Tan Swee Bee, who together own nearly two-thirds of the company.

Lion Pacific's partner in the Subang rail venture, Skypark Rail, is believed to be linked to Tan Sri Ravi Menon, who has substantial interest in the country's railway sector due to his involvement in Ara Group and Hartasuma Sdn Bhd.

Ravi founded Ara group but his reputation in the marketplace glowed due to his role in running Skypark Group, which leases Subang Skypark airport in Subang Jaya from Malaysia Airports Holdings Bhd via Subang Skypark Sdn Bhd.

Ravi is also an executive director at Subang Skypark, which plans to embark on a RM420 million infrastructure redevelopment to transform Subang Skypark, formerly the Sultan Abdul Aziz Shah Airport, into a full-fledged aerospace city by 2015.

PNB not ruling out another big project

By Sharen Kaur
sharen@mediaprima.com.my
Published in NST on April 24, 2013

PERMODALAN Nasional Bhd (PNB) may consider a second development as massive as the RM40 billion Battersea Power Station project in London after weighing all the risks and investment options.

PNB, one of the country's largest fund managers, has an indirect 80 per cent interest in the project through its 36.62 per cent stake in Sime Darby Bhd and 51.63 per cent in SP Setia Bhd.

Sime Darby, SP Setia and the Employees Provident Fund form the consortium that bought the old Battersea Power Station for RM1.99 billion in September last year.

The 15.8ha site overlooks London's River Thames and is only around 2km away from the House of Parliament.

"We are always looking at value propositions. If a project of that scale can bring good yields to PNB, it would be part of our target," said PNB president and group chief executive Tan Sri Hamad Kama Piah Che Othman.

"SP Setia and Sime Darby did their homework and found that this project would give them better returns. Phase 1 of the project has sold quite significantly," he said at the Malaysia Unit Trust Week, which is being held here until Saturday.

"For PNB, this is a positive development as it would churn out good returns and we can pay nice dividends,"

Phase 1 of the project offered 800 apartment units priced at around STG1,000 (RM4,650) per square feet, or from STG338,000 to STG894,000 each. More than half of the units have been sold since January.

Meanwhile, Hamad Kama Piah said PNB is planning a new format for Minggu Saham Amanah Malaysia (MSAM), which will start next year.

MSAM is an annual event organised by PNB since 1999. Perlis is the final stop under the first series.

He said MSAM's objective is to ensure that the public make prudent investment decisions and not get caught in get-rich-quick scams.

"They must understand the risk and returns. The best fundamentals for people to invest in PNB unit trusts funds are low initial payment, easy access, good track record, no penalty for earnings withdrawal, and higher dividend payout.

"Dividend payout by PNB is increasing every year. Last year, we paid RM11.3 billion and the year before that, it was around RM10 billion.

"The six per cent to seven per cent returns we offer are considered very high compared with other types of savings," Hamad Kama Piah added.

Shah Alam LRT link in pipeline

By Sharen Kaur
sharen@mediaprima.com.my
Published in NST on April 24, 2013

 

RM5B-RM6B PLAN: Prasarana is expected to call for tenders next year

THE government may build a third light rail transit (LRT) line from Kelana Jaya to Port Klang, believed to be costing RM5 billion to RM6 billion.

Dubbed the Shah Alam LRT line, Syarikat Prasarana Negara Bhd (Prasarana) is expected to call for tenders for the project next year, after a proper due diligence to be undertaken by the Land Public Transport Commission (SPAD) is completed.

Prasarana is a wholly-owned government company established by the Finance Ministry and the operator and asset owner of LRT lines.

SPAD chief development officer Azmi Abdul Aziz confirmed that the new Shah Alam LRT line is on the drawing board and that it will span 20km to 30km.

He, however, declined to comment on the estimated development cost.

Azmi said it will be an open tender and companies with existing contracts for the Kelana Jaya and Ampang LRT line extension projects will be allowed to bid.

"It is no more like before where companies that had won LRT jobs couldn't bid for the same development. As long as the companies are qualified and have met the necessary funding and technical requirements, they can bid," he said.

"This is totally a new line and very important for the public. Shah Alam is becoming densely populated, with new townships coming up.

"The new line would allow people from Port Klang and Shah Alam to come to the city without hassle. It will complement the existing Kelana Jaya and Ampang LRT lines," he added.

It is learnt that the Shah Alam line will start from the LRT station in Kelana Jaya, head towards the Shah Alam stadium and pass through Klang, before stopping in Port Klang.

In Port Klang, the LRT line will also be linked to the KTM commuter station to serve the growing population.

Malaysia is currently extending the existing Ampang and Kelana Jaya LRT lines under a RM7 billion plan.

The two extensions involve a total of 34km and Prasarana have awarded almost all of the contracts for the jobs.

Spanish firm offers its high-speed ‘El Pato’

By Sharen Kaur
sharen@mediaprima.com.my
Published in NST on April 20, 2013

KUALA LUMPUR: A Spanish bullet train maker has offered a “duck” train for Malaysia’s  

multibillion ringgit high-speed rail (HSR) project.
Talgo, part of a consortium that won a US$9 billion (RM27.4 billion) HSR job in Saudi Arabia last year, believes its “El Pato” (Spanish for duck) trains are suitable for Malaysia’s HSR project.

The Talgo 350 “El Pato” is the latest highspeed train sold in Spain, said deputy chairman Mario Oriol.

The company has a 50 per cent market share in the high-speed market segment there, he told Business Times in an interview here recently.


Talgo wants to be part of a consortium that is making a bid for the HSR project linking Kuala Lumpur and Singapore, Oriol said.

It is in talks with several parties, including government agencies, on the potential alliance.

So far, the HSR project has attracted three proposals from UEM Group Bhd-Ara Group, YTL Corp Bhd and China Infraglobe-Global Rail Sdn Bhd.

He said Talgo’s technology is “the best in its class in terms of weight, energy consumption and accessibility” and, thus, can help reduce investments in infrastructure and operations.

“Weight and energy consumption are very important aspects of the HSR. The lighter the train, the better it would be for the infrastructure.

There will be less damage and repairs. Energy consumption would also be lower.” Oriol said Talgo trains can bring savings on infrastructure development by up to seven per cent as they have lower height and can adapt to any geography.

“This means that if there is a need to go through a hill, a smaller tunnel would be required and there would be less cost incurred.

“The objective is to offer comfort to passengers and save on infrastructure cost,” he said.

Land Public Transport Commission chief development officer Azmi Abdul Aziz told Business Times on Wednesday that the HSR project will take off this year.

He said details of the project are being ironed out and tenders will be called by yearend.

Established in 1942, Talgo is the main supplier of high-speed passenger trains in Spain, Portugal, France, Switzerland, Italy, the United States, Argentina, Kazakhstan, and Uzbekistan.

Talgo trains are known for their unconventional articulated railway passenger cars.

The wheels are mounted in pairs but not joined by an axle, and the bogies are shared between coaches rather than underneath individual coaches. This allows a railway car to take a turn at higher speed with less swaying.

SPAD: HSR details being ironed out

By Sharen Kaur
sharen@mediaprima.com.my
Published in NST on April 18, 2013

KUALA LUMPUR: Details of the high-speed rail (HSR) link between Kuala Lumpur and Singapore are being ironed out and tenders will be called by year-end, the Land Public Transport Commission (SPAD) said.

SPAD chief development officer Azmi Abdul Aziz said the project will take off this year.

"We are waiting for everything to stabilise, such as the general election. It's only after the elections that it will be better for us to move forward.

"Our power limits us to just the Malaysian border. Anything beyond Malaysia we will have to discuss with Singapore.
"To make things happen, the key details have to be there. From next month, we will have more details on how the rail line will be linked between the two countries," Azmi said yesterday.

Malaysia and Singapore in February had in principal agreed to build the HSR link between the two countries, with a target completion date of 2020.

Business Times recently reported that the government is budgeting around RM40 billion for the project, which includes RM10 billion to buy high-speed bullet trains.

Sources familiar with the plan said that both governments are expected to discuss on whether to develop an undersea rail tunnel or an over-sea railway connection.

They also said the line in Malaysia will start from Greater Kuala Lumpur and the final stop would be either in Tuas, central Singapore or somewhere near the Changi International Airport.

The HSR link will have a combination of direct services running non-stop between the two countries, cutting travel time to about 80 minutes or stopping at intermediate stations, which would take around one hour and 45 minutes for each trip.

Based on an initial SPAD study, five new railway stations would be built at Seremban (Negri Sembilan), Ayer Keroh (Malacca), Muar, Batu Pahat and Iskandar Malaysia (all Johor) before heading towards Singapore.

Currently, it takes about eight hours by train, five hours by road and 45 minutes by flight to reach Singapore from Kuala Lumpur.

The HSR project has attracted three proposals from the UEM Group Bhd-Ara Group, YTL Corp Bhd and China Infraglobe-Global Rail Sdn Bhd.

YTL, operator of the KLIA Express, first mooted the idea to build a high-speed rail in the late 1990s and again in 2006.

East coast rail line may cost RM60b

By Sharen Kaur

sharen@mediaprima.com.my

Published in NST on April 18, 2013

Most of the potential 620km East Coast Rail Route’s required investment will be sourced from the private sector, sources say

THE 620km East Coast Rail Route (ECRR) linking Greater Kuala Lumpur and three east coast states in Peninsular Malaysia is expected to cost around RM60 billion, sources say.

Most of the potential line’s required investment will be sourced from the private sector, they added.

The East Coast Economic Region Development Council (ECERDC) has proposed the ECRR to the federal government and its viability is being studied by the Land Public Transport Commission (SPAD).

SPAD plays a central role in improving road and rail-based public and freight transport in the country.

Its chief development officer Azmi Abdul Aziz said the ECRR aims to create rail connectivity to the east coast and provide economic spillover from Greater Kuala Lumpur.

“We are still studying the proposal (by ECERDC). We have not reached any conclusion.

“A new railway scheme will be formed as it will involve cutting across the Main Range (Banjaran Titiwangsa),” Azmi told Business Times on the sidelines of the Rail Solutions Asia conference here yesterday.

He added that the project, if viable, will be implemented in four phases. He, however, declined to reveal the cost.

“We have mapped out plans to develop railway infrastructure in Malaysia up to 2030. We are now working on plans beyond 2030.

This project (ECRR) may be implemented before or after 2030,” Azmi said.

According to sources, ECRR will take about 15 years to develop as it will involve a lot of underground work and building tunnels across Banjaran Titiwangsa.

ECERDC has established that a rail route connecting all the major ports, business centres and towns in Pahang, Terengganu and Kelantan is vital to achieve growth in the east coast.

Based on the National Public Transport Masterplan available on SPAD’s website, the ECRR line may start either from the integrated transport terminal in Gombak, Batu Caves or Serendah,
all in Selangor.

It will enter Pahang, stopping at Bentong, Mentakab or Temerloh, Maran and Gambang before heading on to the Kuantan Sentral station and then onwards to Kuantan Port City.

From there it will go into Terengganu, stopping at Kemaman, Kertih, Paka, Dungun, Ajil, Kuala Terengganu, Penarik and Kampung Raja.

It will then move into Kelantan, passing Tok Bali, Jelawat and Kota Baru, before reaching its final stop in Tumpat, about 9km from the Thailand-Malaysia border.

Business Times reported recently that the railway track between Kerteh and Kuantan, owned by Petroleum Nasional Bhd (Petronas), will be redeveloped for about RM2 billion.

The line, which ceased operations more than a year ago, will form part of the ECRR project, a source said.

Ireka upbeat on breaching RM1b mark

By Sharen Kaur
sharen@mediaprima.com.my
Published in NST on April 17, 2013

Ireka Engineering now has an order book of about RM860 million, including RM640 million of outstanding work.

Ireka Corp Bhd, which is beefing up its infrastructure arm, can expect the division's order book to breach RM1 billion mark soon.

Ireka has bid for close to RM1.2 billion worth of projects, mainly those that suit the skills and expertise of subsidiary Ireka Engineering & Construction Sdn Bhd.

Ireka Engineering now has an order book of about RM860 million, including RM640 million of outstanding work.

Ireka Development Management Sdn Bhd president and chief executive officer Lai Voon Hon said it is eyeing design-and-build contracts as they provide better margins, and therefore boost Ireka Engineering's performance in particular.

Ireka Engineering's ongoing projects are Imperia in Iskandar Malaysia in Johor; construction of viaduct guideways for the Sungai Buloh-Kajang Mass Rapid Transit lines, and Phase 2 of the Pan'gaea Solstice project in Cyberjaya.

For the nine months ended December 31 2012, Ireka recorded a pre-tax loss of RM2.13 million compared with a pre-tax profit of RM12.33 million in the preceding year.

A lower revenue of RM255.6 million posted by the group's infrastructure arm had affected its profit margin due to higher fixed costs and unexpected costs incurred in certain projects.

Lai said Ireka Engineering is now pursuing a design and build commercial building project for a multinational corporation.

He, however, declined to reveal the job details.

"We are negotiating the contract. It is a sizeable job and we expect to land the deal this year. We have been active in the construction industry for 46 years.

"We have done a lot of national projects and started constructing high-rise buildings in the 1990s. We are now merely expanding our expertise in design-and-build work to grow the business," Lai told Business Times.

Ireka, via Ireka Engineering, has also been involved in building highways and expressways, bridges, tunnels, water treatment plants, golf courses, office and residential towers, malls, healthcare park and harbours.

Its design-and-build credentials developed over the last eight years include the construction of Four Points by Sheraton Sandakan Hotel and Harbour Mall in Sandakan Harbour Square, government administrative buildings in Putrajaya, The Westin Kuala Lumpur and Selborn Perdana.

The company also built the Brunei embassy and residence buildings for the Brunei government in Beijing.

London beckons for Ireka

By Sharen Kaur
sharen@mediaprima.com.my
Published in NST on April 13, 2013

FIRST FORAY ABROAD: Group keen to undertake real estate projects worth up to RM500m

Ireka Corp Bhd is gearing up to undertake high-end real estate projects in London worth between RM250 million and RM500 million each to boost earnings.

This will be Ireka's maiden foreign venture on its own.

Until now, its overseas ventures have been undertaken by its 23 per cent associate company, Aseanna Properties Ltd, which has projects in Vietnam.

Ireka Development Management (IDM) Sdn Bhd president and chief executive officer Lai Voon Hon told Business Times that the group is eyeing residential and commercial projects with fast turnaround in London.

"We have seen a few projects in London but nothing is very compelling. We are still scouting," he added.

Lai said Ireka prefers to work with a local partner who is familiar with the market, adding that "this is our preferred road".

"We are interested in a few types of projects in London. These include land development from scratch and taking over existing projects, where the owners are looking to sell," he said.

Ireka is also keen on taking up property and construction projects in Indonesia, Myanmar, the Philippines and Vietnam.

Lai said the group may launch its maiden overseas project this year or in 2014, depending on negotiations and viability of the development in the respective countries.

"Market capitalisation is very important when we go overseas. We want to make sure we are well-capitalised as it is a different ball game. But we ready," he added.

From 2006 till 2012, APL undertook Ireka's property development activities but Lai said that strategy has now changed.

"We find a lot of opportunities in real estate development and have begun to undertake our own projects to improve revenue and net profit," Lai said.

Ireka, which is involved in the infrastructure construction, real estate development and technologies, had volatile earnings recently. 

For fiscal year 2011, Ireka posted a net loss of RM11.71 million but returned to the black a year later with a net profit of RM11.1 million, mainly from construction.

For the first nine months of its year ending March 31 2013, Ireka bled red again, with a net loss of RM4.09 million due to its construction division's losses.

"APL is fully invested now and most of its projects will begin to bear fruits over the next two to five years and Ireka will benefit," he said. 

APL is the property fund arm of Ireka and invests primarily in real estate projects in Malaysia and Vietnam.

Some projects under its belt include Tiffani by i-ZEN, One Mont' Kiara, SENI Mont' Kiara, and Sandakan Harbour Square.

"The revenue and profits from real estate projects is mostly through dividends or capital return from APL based on the 23 per cent holding. This means we don't get regular earnings from APL.

"The only consistent contribution for real estate is from management fee that we derive from APL, which is in the region of two per cent of the net asset value. 

"By undertaking our own projects, there will be better earnings," Lai said, adding that Ireka is maintaining its stake in APL.

Ireka, through IDM, is the exclusive development manager of the fund with an initial size of US$250 million (RM750 million), of which it earns a fixed annual management fee and a performance fee.

20 destinations on Malindo Air's radar

By Sharen Kaur
sharen@mediaprima.com.my
Published in NST on April 12, 2013

2-YEAR TARGET: Malindo Air plans to fly new routes such as China, Japan, South Korea and Indonesia from June 

MALAYSIA'S first hybrid airline Malindo Air has mapped out a strategy to fly to some 20 destinations such as China, Japan and South Korea over the next two years.

The airline's chief executive officer Chandran Ramamuthy said between now and June, Malindo Air will fly to Miri, Sibu, Bintulu, Penang and New Delhi.

Malindo Air started its maiden flight on March 22 from Kuala Lumpur International Airport (KLIA) in Sepang.

Currently, it offers four daily flights between KLIA and Kuching and three daily flights between KLIA and Kota Kinabalu.
In the second half of this year, the airline hopes to fly to China, northern Japan, South Korea and Indonesia from the klia2 terminal, Chandran said.

klia2, the country's new low-cost carrier terminal, is slated to open on June 28 this year. It will be able to accommodate up to 45 million passengers a year.

"We will fly to new destinations when we increase our aircraft fleet. Currently, we are using two Boeing 737-900ERs to serve Kota Kinabalu and Kuching. By June this year, we will be adding two more B737-900s and between July and December, eight more," he said.

Chandran said Malindo Air is targeting to have some 100 planes in its portfolio over the next 10 years.

Starting from 2014, it plans to add 10 new aircraft a year.

The planes will be leased on long-term basis from Lion Air, which has placed an order for over 400 aircraft from Boeing.

Malindo Air is owned by the National Aerospace Defence Industries of Malaysia and Lion Air of Indonesia and offers a hybrid service, which is between full and low-cost airline service.

Jakarta-based Lion Air is Indonesia's largest privately run airline, holding the biggest share of the country's commercial passenger market. As of December 2012, it was the world's largest customer of B737-900s.

"We are riding on our parent company because of economy of scales.

"The whole idea is to position Malaysia as a transit hub. We want to create a hub at klia2 and the Kota Kinabalu airport to bring passengers from Lion Air to Malindo Air and fly them within Malaysia and to Asia," Chandran said.

Lion Air, which carried nearly 30 million passengers last year, expects to serve 36 million passengers this year. Malindo Air is targeting 10 per cent of the market from Kuching, Miri, Bintulu and Sibu.

"We are bullish on the performance of Malindo Air. We are neither a low-cost carrier nor a full-service airline. That is why we are called a hybrid airline. We provide aerobridge facilities and in-flight services, and affordable fares," he said.

Malindo Air take-off from Skypark in June?

By Sharen Kaur
sharen@mediaprima.com.my
Published in NST on April 11, 2013

IN FINAL NEGOTIATIONS WITH DCA: Low-cost airline is to use terminal to serve new destinations in Malaysia and Indonesia, sources say

MALAYSIA'S newest low-cost airline Malindo Air will operate from Skypark Terminal in Subang starting June this year to serve passengers in Malaysia and Indonesia.

It is understood that Malindo Air is in the final stage of negotiations with the Department of Civil Aviation for approval to fly from the airport.

Skypark Terminal is now operated by general aviation companies such as Berjaya Air and FireFly. It also serves turboprop flights.

Sources said Malindo Air is expected to obtain the approval to fly from Skypark Terminal next month.

Malindo Air is eyeing Skypark Terminal to serve new destinations in Malaysia and Indonesia, they added.

"The idea is to bring people from small cities in Indonesia to Kuala Lumpur, and connect them to international flights via its parent company, Lion Air," one source said.

He added that Malindo Air is targeting Sumatra due to its market size.

The airline's chief executive officer Chandran Ramamuthy declined to deny nor confirm when contacted yesterday.

"We are expanding but I will not comment on whether or not we are going to operate from Skypark Terminal.

"We are looking to build the airline business by riding on the strength of Lion Air," Chandran told Business Times.

Malindo Air is 51 per cent-controlled by National Aerospace and Defence Industries Sdn Bhd and 49 per cent by Lion Air of Indonesia.

Its entry marks a milestone in Malaysia's aviation industry as now the country has a third full-fledged airline after AirAsia Bhd and Malaysian Airline System Bhd.

Malindo Air started flights on March 22 from the Kuala Lumpur International Airport in Sepang.

It offers four daily flights between Kuala Lumpur and Kuching, and three daily flights between Kuala Lumpur and Kota Kinabalu using two Boeing 737-900ER aircraft.

Headquartered in Jakarta, Lion Air is Indonesia's largest privately run airline with the biggest domestic market share.

The airline flies to several cities in Indonesia, and to Singapore, Vietnam, Malaysia and Saudi Arabia. It has a few charter routes to China and Hong Kong.

As of December 2012, the Lion Air's fleet is the world's largest customer of Boeing 737-900ER.

Ireka: Viet projects starting to bear fruit

By Sharen Kaur
sharen@mediaprima.com.my
Published in NST on April 9, 2013



IREKA Corp Bhd is poised to gain from its investments in Vietnam as most of the projects will start to bear fruits between now and 2018, boosting the group's earnings, said a top official.

Its infrastructure arm Ireka Engineering and Construction Vietnam Co Ltd (IECVCL) has completed a RM112 million job to build the City International Hospital in Ho Chi Minh City.

The hospital is part of the RM670 million International Hi-Tech Healthcare Park (IHHP), which consists of private hospitals, mixed commercial, hospitality and houses.

Ireka's 23 per cent associated firm Asean Properties Ltd (APL), which is listed in London and involved in real estate development in Malaysia and Vietnam, has a 66.4 per cent stake in IHHP.


Ireka Development Management Sdn Bhd president and chief executive Lai Voon Hon said IECVCL will start phase 2 of IHHP this year, to build medical suites, residences and two centres of excellence.

"Healthcare is a growing industry and we are very confident of entering this field, especially an emerging market like Vietnam," Lai said in an interview recently.

Ireka has also invested in Nam Long Investment Corp, one of the largest private real estate developers in Vietnam, which made its debut on the Ho Chi Minh City Stock Exchange yesterday.

Ireka's interest in Nam Long since 2008 is via APL, which owns 16.32 per cent of Nam Long. The stake is currently valued at about US$22.6 million (RM69.16 million).

"We are excited with our investment in Nam Long. We made the investments as we saw the potential in affordable housing. The company has a huge land bank, which is difficult and costly to get in Vietnam.

"Nam Long develops branded affordable houses. Despite the worst period of property development in Vietnam, they sold very well," Lai said.

The affordable housing sector demand has big potential with the current population of around 90 million in Vietnam. Ho Chin Minh City, with a population of about 10 million, needs around 70,000 affordable apartments per year. Nam Long currently provides 2,000 units a year to the market.

The stimulus package of VND30 trillion (RM4.38 billion) credit programme by the Vietnamese government for buyers of affordable housing, which takes effect this month, is expected to lift the property market.

Nam Long has over 560 hectares of land, mainly in Ho Chi Minh City and neighbouring provinces. APL is co-developing the Waterside Estates in District 9 of Ho Chi Minh City with Nam Long.

KLCC stapled REIT to be among Asia's largest

By Sharen Kaur
sharen@mediaprima.com.my
Published in NST on April 9, 2013

KLCC REIT, which will be called KLCCP Stapled Group after a corporate restructuring, is 

expected to be listed in early May.  
KUALA LUMPUR: KLCC Property Holdings Bhd's new stapled real estate investment trust (KLCC REIT) is set to become one of Asia's largest listed groups with RM15.4 billion in assets and nearly RM13 billion market capitalisation upon listing.

KLCC REIT, which will be called KLCCP Stapled Group after a corporate restructuring, is the first syariah-compliant stapled REIT in the country.

KLCC Property group chief executive officer Hashim Wahir said the REIT is expected to be listed in early May.

To achieve a stapled REIT structure, KLCC Property will have to undertake three key restructuring steps.

The first is to acquire the remaining 49 per cent shares in Midciti Resources Sdn Bhd, the owner of Petronas Twin Towers, from KLCC Holdings Bhd (KLCCH), for RM2.86 billion.

The second step is for KLCC Property to rationalise its portfolio into a more efficient structure by injecting the Petronas Twin Towers, Menara ExxonMobil and Menara 3 Petronas into KLCC REIT.

The last step is stapling of KLCC Property shares to KLCC REIT units, which will be quoted as a single security and traded on the Main Market of Bursa Malaysia.

Shareholders of KLCC Property approved the company's proposed stapled REIT structure at its extraordinary general meeting (EGM) here yesterday.

"This is a very interesting exercise. It will provide Bursa Malaysia with a very large REIT going forward," Hashim said after the EGM.

Hashim is bullish on the performance of the stapled REIT.

"A year ago the stock price for KLCC Property was RM3.80. It's now above RM7. We can't be anymore bullish than the current price. I believe the market has already factored in everything," he said.

KLCC Property was down four sen yesterday to close at RM7.05. The current share price reflects a 12.7 per cent premium to the net asset value of the company.

There will be investor appetite for the stapled REIT because of the yields and backing from Petroliam Nasional Bhd.

All the assets are fully occupied with a 15-year tenancy.

Under an agreement with the tenants, there will be an upward adjustment in the rentals every three years by three per cent.

The new stapled security structure is also committed to paying more than 90 per cent of its distributable income as dividends.

Hashim said more assets would be injected into the REIT such as Kompleks Dayabumi, which is currently being upgraded to include a new high-rise office tower, and a new building structure nearby Mandarin Oriental.

"We have 0.6ha (site) nearby the hotel. We are talking to multinational companies to be the anchor tenant. Once that is established, building construction would commence. It may be a replica of Menara 3 Petronas, which has a retail component," he said. 

 

Brahim's wins 5 more contracts

By Sharen Kaur
sharen@mediaprima.com.my
Published in NST on April 3, 2013

KUALA LUMPUR: Brahim's Holdings Bhd, the only licenced manufacturer of refined sugar in Sabah and Sarawak, has secured in-flight catering contracts from five leading airlines that will boost its revenue and net profit this year.

Its 70 per cent subsidiary, Brahim's Airline Catering Sdn Bhd (BAC), formerly called LSG Sky Chef-Brahim's Sdn Bhd, secured the contracts from Air France, Philipines Airlines, Nas Air, Xiamen Airline and Turkish Airlines.

This brings the total number of foreign carriers being catered by Brahim's to 36.

Brahim's biggest customer is Malaysian Airlines (MAS), which also owns 30 per cent of BAC.
The company also services AirAsia and AirAsia X and 30 over foreign airlines.

BAC prides itself in its globally recognised 100 per cent-halal flight kitchen with a fully halal-compliant integrated food logistics supply chain.

Operated by over 1,000 staff from a 59,000 sq meter complex at Kuala Lumpur International Airport (KLIA) in Sepang, it is the world's biggest halal flight kitchen.

In a statement yesterday, Brahim's chief executive officer Goh Kee Kuang said the success of securing the five new contracts is a development from its recent Malaysianisation programme.

Under the programme, the company bought out the remaining 49 per cent shares in Brahim's Sdn Bhd (BSB), formerly Brahim's-LSG Sky Chefs Holdings Sdn Bhd, from partner LSG Sky Chefs Asia.

The acquisition amounting to RM130 million was funded by Standard Chartered Bank Malaysia Bhd and completed in January this year. Prior to the acquisition, Brahim's had a 51 per cent stake in BSB.

Brahim's latest data showed that around 92 per cent of revenue came from the in-flight catering business.

Business Times has reported that Brahim's expects a quantum leap in net profit and revenue in the current year, to be driven by BSB.

BSB, through BAC, has a 25-year concession until 2028 to provide catering and related services to MAS at KLIA and Penang Airport.

For fiscal 2010 and 2011, Brahim's equity-accounted RM165.8 million and RM184.4 million respectively from BSB. From this year, it is expected to generate over RM300 million a year from BSB.

Plan to replicate Sunway Montana, Rymba Hills

By Sharen Kaur
sharen@mediaprima.com.my
Published in NST on April 3, 2013

KUALA LUMPUR: Sunway Bhd, controlled by property tycoon Tan Sri Jeffrey Cheah, aims to replicate its two projects, Sunway Montana and Rymba Hills, if it finds land which is suitable for the development.

Ho Hong Sang, managing director of Sunway's property development division, said it is scouting for land in the Klang Valley with similar features to the two projects.

Sunway Montana, located in Desa Melawati, is an exclusive hillside enclave. The hallmark features include an exclusive 5.63ha private forest with skywalk.

Rymba Hills features a 2.61ha private forest and well-planned park-inspired environment, nature trails, meditation pavilions and exercise par courses.

Located in Sunway Damansara, it consists of 80 units of leasehold three-storey villas, with a price range of RM4 million to RM4.9 million per unit. The units are sold and completed.

"We will replicate these two developments if there is another piece of land available for development. We will continue to scout for good locations," Ho told Business Times yesterday, during a visit to the Sunway Montana clubhouse.

With an estimated gross development of RM550 million, Sunway Montana comprises three components - courtyard villas, semi-detached homes and town houses.

This low-density development also offers exclusive clubhouse facilities, which were built for RM10 million, and gated community with patrolling services.

Almost 60 per cent of the development is green with extensive landscape.

Phase One, comprising 57 units of courtyard villas (fully sold) and 50 semi-detached homes (70 per cent sold) were launched at the end of 2011.

Ho said the prices of these properties have increased by 15 per cent since the launch.

"The current price for the courtyard villas and semi-detached homes are RM2.1 million and RM2.9 million respectively. We have just launched Phase 2 and sold about 30 per cent of the units," Ho said.

Phase 2, dubbed the Gardens Homes, consists of 198 units of three- and four-storey townhouses, each worth RM1.4 million to RM1.7 million, or a combined RM280 million.

Ho said majority of the buyers for Sunway Montana were locals, mainly up-graders looking for a better-quality life.

"We are not just selling a real estate but an environment. This is the lifestyle people are looking for. Landed property will always be sought after," he added.

Maju expected to win US$200m Mideast job

By Sharen Kaur
sharen@mediaprima.com.my
Published in NST on April 2, 2013

Maju Holdings Sdn Bhd, controlled by businessman Tan Sri Abu Sahid Mohamed, has emerged as the front runner for a US$200 million (RM620 million) contract to build houses in Saudi Arabia.

If successful, this will be the company’s maiden development project outside of Malaysia.

Chief executive officer Ravi Manchanda confirmed that talks are ongoing. He, however, declined to reveal details on the project.

Maju formed Maju Holdings (Saudi Arabia) Ltd in 2009 with Trade House Group Holdings, a Riyadh-based family-owned business, which has been operating the Toys ‘R’ Us and Babies ‘R’ Us franchises in the kingdom since 1996.

It is understood that the scope of the contract involves designing and building low-cost and high-end houses, as well as villas.

“We are talking to several big players in Saudi Arabia and in negotiations with them.

We hope to sign the deal soon,” Manchanda said, adding that if successful, construction works can commence by year-end.

The Saudi Bin Laden group and the Saudi Oger group are two of the biggest construction companies in the kingdom.

Manchanda said Maju is working with state-owned trade finance provider Export-Import Bank of Malaysia Bhd to help it fund the project.

Maju is one of Malaysia’s largest privately held companies, with interest in construction, property, infrastructure, services and manufacturing businesses.

The company’s signature projects include the Terminal Bersepadu Selatan in Bandar Tasik Selatan and the Maju Expressway, which links Kuala Lumpur International Airport and Putrajaya to Kuala Lumpur.

Maju, formed in 1978, also owns Perwaja Holdings Bhd, Malaysia’s largest steel producer of upstream products.

If the company does manage to secure the Saudi contract, it will be following the footsteps of a host of other Malaysian companies that are banking on the kingdom as the new frontier for development in West Asia.

Saudi Arabia’s economy grew by 6.8 per cent last year and this has helped it achieve a per capita income of 93,317 riyal (RM77,000), its best on record. It is poised to expand slightly more than three per cent this year.

Its construction sector, the largest in the Middle East, is expected to grow at 32 per cent to 35 per cent year-on-year until 2015. Its construction and infrastructure sub-sectors grew by 177 per cent in 2012, BofA Merrill Lynch said in a July report last year.

Among the Malaysian companies that have a presence in Saudi Arabia are MMC Corp Bhd, a unit partly-owned by Tan Sri Syed Mokhtar Albukhary, and Eversendai Corp Bhd. MMC won the rights to develop and manage the US$30 billion Jizan Economic City in 2006, while Eversendai is undertaking structural steel works for several towers there
.

RM900m facelift for Kompleks Dayabumi

By Sharen Kaur
bt@mediaprima.com.my
Published in NST on March 30, 2013

KOMPLEKS Dayabumi, one of the oldest skyscrapers in Kuala Lumpur, will get a RM900 million upgrade,
with its retail podium demolished to make way for a high-rise office-cum-residential tower.

KLCC Property Holdings Bhd (KLCCPH), a member of Petroliam Nasional Bhd (Petronas) Group via its
wholly-owned unit Kompleks Dayabumi Sdn Bhd, is refurbishing the 35-storey Menara Dayabumi for around RM50 million to RM70 million while its annexed six-storey retail podium, City Point, will make way for the new tower block.

The upgrading plan, which started last year, is slated to be completed in 2015 or 2016.

KLCCPH chief executive officer Hashim Wahir did not respond to Business Times queries.

Menara Dayabumi, a landmark in Kuala Lumpur, was the site of Malayan Railway workshops and depots
from 1900s to 1981. The General Post Office, a company controlled by Tan Sri Syed Mokhtar Al Bukhary
and located adjacent to the complex, however, is not up for redevelopment.

Business Times understands that KLCCPH is expected to raise the rental rates by more than 50 per cent and, thereby affect majority of its tenants.

"KLCCPH is looking at growing its recurring income base and the upgrading of the complex is crucial to
meet certain targets," said a source.

For fiscal year 2010, KLCCPH increased its office rental rate for Kompleks Dayabumi from RM4 per sq ft to RM5 psf through internal upgrades. According to KLCCPH's 2011 annual report, the complex managed to yield rental growth with higher rates with refurbishment to the lift lobbies. That had boosted its revenue by 13 per cent year-on-year.

The source said the audited net book value of the complex, which was RM330 million at March 31 2008,
would be surpassing the RM700 million mark once renovations are completed.

Construction on the complex began in 1982 and was completed in 1984. The Urban Development Authority
was the owner then until KLCCPH took over in 2005.

Menara Dayabumi was the former headquarters of Petronas before the Petronas Twin Towers were built.
Current tenants include several Petronas subsidiaries, CIMB, Maybank, BSN, Mercy Malaysia, Malaysian
Economic Research and retailers.

-ENDS-