SP Setia eyes E&O

By Marina Emmanuel and Sharen Kaur
Published in NST on July 29 2011


George Town: Major shareholders of SP Setia Bhd, Malaysia's biggest developer, plan to buy a strategic stake in property and hospitality company Eastern and Oriental Bhd (E&O), people familiar with the matter said yesterday.

Business Times learnt that shareholders of SP Setia had made overtures in recent months with certain shareholders of E&O, who may have included Temasek Holdings (Pte) Ltd director Goh Yew Lin.

SP Setia's three biggest shareholders currently are Permodalan Nasional Bhd with a 32.9 per cent stake, the Employees Provident Fund with a 14.47 per cent interest, and SP Setia president and chief operating officer Tan Sri Liew Kee Sin, with 11.96 per cent.

As at July 30 2010, Singapore's G.K. Goh Holdings Ltd owned 13 per cent of E&O.

E&O managing director Datuk Tham Ka Hon and spouse Datin Chua Cheng Boon collectively own about 17 per cent of the company.

Liew did not confirm or deny if indeed SP Setia is interested in buying E&O.

A company official from SP Setia. who did not want to be named, said SP Setia is always looking for new acquisitions including land deals and strategic stakes.

"Some plans are remote and some more certain. We won't comment on speculations," he said.

E&O deputy managing director Eric Chan, when contacted, said the management was not in any acquisition talks with any party.

"We remain committed to our strategic gameplan to establish our position as a true luxury lifestyle property development group, which we will achieve via international and regional exposure of the E&O lifestyle brand.

"This is through the establishment of strategic alliances with renowned international institutions and the development of new growth engines," Chan added.

-ENDS-

KTMB's RM1b cargo revenue target

By Sharen Kaur
sharen@nstp.com.my
Published in NST on July 27 2011

Kuala Lumpur: National railway company Keretapi Tanah Melayu Bhd (KTMB) aims to rake in revenues of more than RM1 billion from its cargo business in five years, its chief said.

Currently, the cargo business, coupled with KTMB's multi-modal and distribution units, makes about RM210 million revenue per annum.

Business Times reported on Monday that KTMB's cargo and multimodal units will be combined and parked under a new company called KTMB Logistics Sdn Bhd, headed by Datuk Alias Kadir.

KTMB president Dr Aminuddin Adnan said the RM1 billion target is achievable.

He is attributing growth to the new six-car Electric Multiple Unit (EMU) trains and strategic alliances that KTMB is forming with other train operators.

KTMB will get its first set of EMU trains on September 6 while five more will be shipped by year-end.

The rest of the 38 sets, which the government had ordered for RM1.9 billion, is expected to be delivered by June 2012.

"This is the kind of transfor-mation that we are working on. We are waiting for the Ministry of Finance Inc to approve the plan after which we will come up with a new business model to turn around KTMB," Aminuddin told Business Times at Balai Berita here yesterday.

KTMB is segregating its core businesses under a two-phase restructuring plan, with the aim of being more efficient and profi-table.

Under the Government Transformation Plan, 33 listed and unlisted government-linked companies will undergo restructuring in various stages, including KTMB, to operate more efficiently.

"KTMB has a lot of potential waiting to be unleashed. We hope it will start making operating profits in two years. The cargo business will be the first to help it turnaround," Aminuddin said.

KTMB has been making losses since it was corporatised in 1992 due to high operating costs. It did, however, make a net profit of RM9 million to RM15 million from 1993 to 1995, before falling into the red again in the following years.

-ENDS-

Getting KTMB back on track

By Sharen Kaur
sharen@nstp.com.my
Published in NST on July 25 2011

National railway company Keretapi Tanah Melayu Bhd (KTMB) is segregating its core businesses under a two-phase restructuring plan, with the aim of being more efficient and profitable.

Under the Government Transformation Plan, 33 listed and unlisted government-linked companies will undergo restructuring in various stages, including KTMB, to operate more efficiently.

"The restructuring is a major step for KTMB to focus on its core business of transporting people and goods to be profitable. It has been difficult for KTMB to make money due to high operational cost," a source told Business Times.

Company sources said KTMB's cargo and multi modal units will be combined and parked under a new company called KTMB Logistics Sdn Bhd.

The chief executive officer for KTMB Logistics, now involved in freight train operation services, is Datuk Alias Kadir who is a KTMB board member.

Multi modal provides ocean shipping, road haulages and port clearance services.

A source said KTMB president Dr Aminuddin Adnan will head the passenger train services, railway infrastructure and rolling stocks.

The second phase of the restructuring will see the separation of the train operation services, rolling stocks and railway infrastructure from KTMB's operation. Railway infrastructure includes land, buildings, stations and tracks.

The assets will be managed by Railway Assets Corp (RAC), headed by Abdul Kadir Latiff, the source said. RAC, which owns all the assets and is wholly-owned by the Ministry of Transport, will lease them back to KTMB at a fixed cost.

The assets were acquired by the government over a number of years and were parked under RAC to manage. However, KTMB took over the management of the assets as RAC did not have enough manpower.

It is learnt a consultant has been appointed by the Minister of Finance Inc (MOF) to study the track access fee and leasing cost for KTMB.

According to the Auditor-General's report tabled in Parliament last October, KTMB recorded RM1.45 billion in accumulative net losses up until 2008 and cannot "afford" to pay back its own operational costs and loans.

KTMB has been bleeding red ink since it was corporatised in 1992 due to high operating costs. Nevertheless, it did make a net profit of RM9 million to RM15 million from 1993 to 1995, before falling into the red again in the following years.

It is understood that the company broke even last year, led by cost-cutting measures and improvement in train services.

Meanwhile, Aminuddin's contract, which expires on August 1, has been extended by the MOF by two years.

The source said that Aminuddin has accepted the offer. He was not available for comment.

-ENDS-

Another British varsity in Iskandar

By Sharen Kaur
sharen@nstp.com.my
Published in NST on July 19 2011

Britain's University of Reading Business School is setting up a branch campus in EduCity in Iskandar Malaysia, Johor, for between RM150 million and RM200 million, sources familiar with the plan say.

This would make it the third education group from the UK to set up branches in Iskandar Malaysia, highlighting their confidence in growth in Asian markets.

To be known as University of Reading Iskandar, construction is due to start next year, said a source.

It is learnt that Education@Iskandar Sdn Bhd, a unit of Iskandar Investment Bhd (IIB), is expected to sign a partnership agreement with Reading Business School soon.


EduCity is the education hub of Iskandar Malaysia, comprising world-class multi-university campuses, international schools and colleges, as well as recreational facilities and accommodation for over 20,000 students.

Demand from foreign universities has been so strong that the allocated land for EduCity is fully occupied. But IIB has said it would provide more land for EduCity.

The others that have committed are Marlborough College, one of the UK's leading independent co-educational boarding schools, and Newcastle University Medical Malaysia (NUMed), which is being built for RM90 million and due for opening this year.

IIB did not respond to questions sent by Business Times.

Set up in 2001 and located in England, Reading Business School is the centre of the world's business research and teaching.

The global institution had said in April it is investigating the prospects to set up a branch campus in Malaysia.

This was after a discussion with Datuk Zakaria Sulong, the High Commissioner of Malaysia to the UK, and leading regional business representatives on the investment potential in Malaysia.

Talks were centred on investments in Malaysia and how students and graduates of Reading Business School will have good chance for work placements.

Besides Marlborough College and NUMed, the hub consists of the Netherlands' Dutch Maritime University, the RM300 million Management Development Institute of Singapore, and the S$82 million (RM203 million) Raffles University Iskandar by Singapore's Raffles Education Group.

 

-ENDS-

George Kent-led group on track for RM1b project

By Sharen Kaur

sharen@nstp.com.my

Published in NST on July 8 2011

A consortium headed by George Kent Bhd has emerged as the odds-on favourite to win a contract worth more than RM1 billion to help undertake system works for the light rail transit (LRT) Ampang line extension project.

 
Other members of the consortium include local engineering firm Global Rail Sdn Bhd, Lion Pacific Sdn Bhd, Bombardier Signalling, China Railway Construction Corp (CRCC) and Tewet GmbH, a project management consultant company.

Business Times understands that the George Kent-led consortium was the second lowest bidder, having placed a bid at RM1.13 billion to undertake the job.

The tender for the system work on the proposed Ampang line closed on June 16. It is further learnt that some eight companies were invited to bid for the job.

Subsequently, Syarikat Prasarana Negara Bhd had invited the companies to make their presentations between June 22 and June 24.


Bids submitted for the job were between RM950 million and RM1.45 billion.

People familiar with the matter said Prasarana has shortlisted four companies after the presentations were made.

The other three firms are SNC Lavalin/WW Engineering, Siemens/Scomi and Samsung/LG.

Their bids were priced at RM1.38 billion, RM1.17 billion and RM1.16 billion, respectively.

"They were shortlisted based on having offered the best technical solution and the most efficient way of managing the signalling migration plan so as not to interrupt

the current train operation during the project implementation stage," the source told Business Times, adding that Prasarana has budgeted RM1.5 billion for the system works.

The budgeting was done by UK consultant Halcrow/HSSI.

The other four contenders who did not make it were Colas/CMC/Uniway joint venture, the partnership which recently won a RM673.9 million contract for system works for the Kelana Jaya line; Invensys Rail/Ingress/Balfour Beatty; Posco/Daewoo and Ansaldo/Emrail.

It is learnt that Colas/CMC/Uniway offered the highest price. The lowest bidder at RM950 million was Invensys Rail/Ingress/ Balfour Beatty, which had also bid for the Kelana Jaya line extension.

According to the source, the Ansaldo joint venture was not shortlisted as the company (Ansaldo) already has a contract to work on the Ipoh-Padang Besar double tracking project.

Invensys Rail was also not chosen as it too has a contract for the Seremban-Gemas double tracking project where it is currently facing ongoing issues and delays in the project implementation. 

-ENDS-

Naza TTDI to launch high-rise luxury homes

By Sharen Kaur
sharen@nstp.com.my
Publshed in NST on July 4 2011

NAZA TTDI Sdn Bhd, the property development arm of the Naza Group is launching three high-rise luxury residential towers in Kuala Lumpur, worth more than RM1 billion by the year-end.

Group managing director SM Faliq SM Nasimuddin told Business Times that it will launch one block with more than 50 floors at the company's RM4 billion Platinum Park development in Kuala Lumpur.

This will be the first residential tower at the Platinum Park, currently the largest luxury development in Kuala Lumpur.

At Platinum Park, three buildings are currently under construction. They include two 50-storey office towers, each to house the new headquarters of Felda Group and Naza Group, and the 38-storey Tabung Haji tower.

The second residential project featuring twin towers, retail and food outlets on a 0.8 hectare is located near embassies such as the Singapore High Commission on Jalan Tun Razak.

The indicative selling price for each unit at the two residential towers would be more than RM1,600 per sq ft, based on the current market price, Faliq said.

The third residential project comprising 30 floors will be developed on a 0.4ha site in Taman Tun Dr Ismail, or near the Damansara Specialist Hospital.

Based on prices of residential properties within the vicinity such as Glomac Damansara and Tropics Serviced Apartment above the Tropicana Mall, Naza TTDI may sell the units at more than RM750 psf.

Faliq said local and foreign investors from the Middle East, Europe, Singapore and Hong Kong have approached the company to take up individual units and buy en bloc.

The projects are designed to attract foreign investors, in line with the company's plan to build its brand and venture overseas to build townships and mixed developments.

Faliq had said in March that it plans to launch 18 new projects this year worth RM1.6 billion and achieve a turnover of RM1 billion for fiscal 2011.

But the company is most likely to surpass RM2 billion, being the value of new launches, with the three residential projects. -ENDS-