DBE major shareholder, Maybank PE in talks today

By Sharen Kaur
sharen@nstp.com.my
Published in NST on January 30, 2012
Kuala Lumpur: The controlling stakeholder of poultry breeder DBE Gurney Resources Bhd is scheduled to meet key officials of suitor Maybank Private Equity (PE) today.

DBE is controlled by the Ding family, headed by its patron Ding Chong Chow, who is also the founder and executive chairman of the company.

The meeting comes just weeks after KN Kenanga Holdings Bhd made a presentation to CI Holdings Bhd group managing director Datuk Johari Abdul Ghani.

Kenanga values DBE at 14 sen a share, the company said in a report early this month. “Based on our earnings projections, we reckon that the stock should be valued at 14 sen a share, representing nine times 2012 price-to-earnings ratio,” wrote Kenanga’s analyst Chan Ken Yew in a report titled “A better
future”.

Two weeks ago, DBE told the stock exchange that it is in discussion with a shareholder of CI Holdings which is at a preliminary stage.

Business Times understands that the Maybank PE valuation is slightly higher than the Kenanga offer, and it could lead to DBE being taken private. The offer is said to be in range of between 18 sen and 20 sen a share.

Last year alone, several poultry and food makers had underlined plans to take their companies private either by the owners directly or with the help of PE firms.

Poultry tycoon Tan Sri Francis Lau Tuang Nguang outlined plans last year to take Leong Hup Holdings, the country’s largest integrated poultry operator private, while fellow Johor-based food producer Mamee Double-Decker Bhd was also taken private.

“Food business is recession-proof, and PE firms are keen, as they can either relist these firms here or overseas at a later stage,” said an analyst.

Also, QL Resources Bhd, the biggest producer of surimi, surimi-based products and fishmeal manufacturer in Malaysia, bought a 23.8 per cent stake in the Klang-based poultry company Lay Hong Bhd to help expand its own food business.

The biggest privatisation of a food-cum-poultry producer, however, is s unfolding here, with the offer from Johor Corp Bhd and PE firm CVC Capital Partners Asia III Ltd to take QSR Brands Bhd and KFC Holdings Bhd, which also owns the poultry firm Ayamas Bhd private, in a deal valued at RM5.3 billion.

There is interest in DBE because the company has cleaned up its balance sheet and debts over the past couple of years and is set to register its first full-year profit in six years for the year ended December 31 2011.

Up to the nine months ended September 20 2011, DBE registered a net profit of RM1.194 million. In 2010, it suffered a net loss of RM3.71 million, while in 2009 and 2008, its net loss was at RM2.9 million and RM20.40 million respectively.

Apart from the two bidders, Datuk Raymond Chan Boon Siew, the controlling stakeholder of Sagajuta (Sabah) Sdn Bhd, is also said to be interested in DBE.

MAHB expects to close 2 new deals by year-end

By Sharen Kaur
sharen@nstp.com.my
Published in NST on January 27, 2012

AIRPORT operator Malaysia Airports Holdings Bhd (MAHB) expects to close two new airport concession deals in Asia by the year-end in a drive to improve its earnings from overseas, its chief said.

Managing director Tan Sri Bashir Ahmad said MAHB is in preliminary discussions with local parties in China and Indonesia to form a consortium and bid for airport concessions in the two countries.

Bashir declined to reveal the parties involved. It is learnt that MAHB may rope in India’s GMR Group as its consortium partner. MAHB has been partnering GMR since 2002.

Its most revent tie-up with GMR is to develop and manage a resort terminal in Maldives, which is set to be opened in 2014.

The two are managing and developing three other airports internationally.

Bashir said as more and more airports get privatised, established airport operators like MAHB as well as those managing Changi and Frankfurt airports are looking at opportunites to be involved in the management and development of airports overseas.

“There is big potential in China and Indonesia and we are looking at growth in those areas. There are many airports that need upgrading. We think we could close two airport deals by year-end,” he said.

On funding for the potential concessions, Bashir said MAHB will use internally-generated funds. “The value is in the equity when you invest in an asset and we believe investing in airport concessions is a good deal although there is a long gestation period,” he told Business Times during a visit to Istanbul Sabiha Gökçen International Airport in Turkey on Tuesday. 

“We think having two more airport concessions in our portfolio will be good for us. We are not looking at over-stretching ourselves and be debt-laden,” Bashir said.

MAHB, together with its consortium partners, currently holds four airport concessions overseas. They are Sabiha Gökçen, MALE International Airport in Maldives, Rajiv Gandhi International Airport in Hyderabad and Indira Gandhi International Airport in Delhi, India.

Among the four concessions, the airports making profits now are Rajiv Gandhi and MALE. Collectively, they are contributing less than eight per cent to group earnings, Bashir said.

He said MAHB is aiming for double-digit earnings’ contribution from its overseas operations within the next one to two years.


For the nine months ended September 30 2011, MAHB posted a net profit of RM278.2 million on revenue of RM1.92 billion.

Khazanah eyes US$3b Int Healthcare listing

By Sharen Kaur
sharen@nstp.com.my
Published in NST on January 26, 2012

KHAZANAH Nasional Bhd, the government’s investment arm, is
looking at raising more than US$3 billion (RM9.24 billion) from the planned listing of its healthcare subsidiary, Integrated Healthcare Holdings Sdn Bhd (IHH).

Business Times also understands that Khazanah had set the second half of the year as the deadline for IHH’s initial public offering (IPO).

The group has appointed several parties to advise and handle the IPO.

At a press conference here yesterday, Khazanah managing director Tan Sri Azman Mokhtar declined to reveal details of the IPO.

However, he said it is Khazanah’s goal to see IHH listed in 2012.


In April last year, Azman reportedly said that IHH would be listed within three years in Singapore or Kuala Lumpur, or possibly via a dual listing on Bursa Malaysia and the Singapore Stock Exchange.

At more than US$3 billion, IHH’s IPO will be Malaysia’s biggest since Petronas Chemicals Bhd’s listing in November 2010 which raised US$4.1 billion (RM12.6 billion).

Meanwhile, Azman said Khazanah will consult its new Turkish partners to help in the IHH listing. They are Acibadem Group founder Mehmet Ali Aydinlar and private equity fund Abraaj Capital. They own 4.2 per cent and 7.1per cent stakes, respectively, in IHH, after selling their shares in Acibadem Saglik Yatirimlari Holding A.S. (ASYH) to Khazanah and IHH.

The listed IHH will have assets of Singapore’s Parkway Holdings Ltd, Pantai Hospitals and the International Medical University in Malaysia.

The IPO will also include ASYH. The listing of IHH will be in line with the Malaysian government’s interest in pushing
state entities to divest commercial holdings to attract foreign investors and boost stock market liquidity.

“The company will put out the relevant documents in due course,” Azman said.

Analysts who spoke to Business Times said the timing is right for IHH’s listing since Khazanah has added a new chapter to its healthcare portfolio by buying into ASYH.

Khazanah owns a 75 per cent direct and indirect stake in ASYH, a Turkish hospital chain that operates 14 hospitals and nine outpatient centres in Turkey.

It paid RM3.7 billion for the deal by way of cash and shares.

Azman said Khazanah is aiming for IHH to be the world’s largest healthcare service provider.

Currently, it is among the world’s largest healthcare groups.

IHH also owns a stake in India’s Apollo Hospitals Enterprise Ltd.

On whether Khazanah was eyeing a stake in India’s Sterling Hospital group, Azman declined to comment.

Khazanah has spent US$3.7 billion (RM11.4 billion) on acquisitions of healthcare service providers since 2005, according to Bloomberg data.

MRT Corp to call for tenders worth RM15b

By Sharen Kaur
sharen@nstp.com.my
Published in NST on January 26, 2012

MRT Corp is expected to call for tenders for 18 elevated civil, station and depot work packages

KUALA LUMPUR: Mass Rapid Transit Corp Sdn Bhd (MRT Corp) is expected to call for tenders for 18 elevated civil, station and depot work packages worth around RM15 billion for the Klang Valley Mass Rapid Transit (KVMRT) Sungai Buloh-Kajang line in the first half of this year, people close to the company said.

The value is for the first phase of the project involving some 20 kilometres between Maluri and Kajang, a source said.

Some 28 companies have been pre-qualified to bid for the jobs.

They include Sunway, IJM Corp Bhd, Malaysian Resources Corp Bhd, Gadang Holdings Bhd, Muhibbah Engineering Bhd, Mudajaya Corp Bhd, MTD, Loh & Loh Corp Bhd, Fajarbaru Builder Group Bhd, WCT Bhd, TRS, Ahmad Zaki Resources Bhd, Naim Engineering Sdn Bhd and Pembinaan Mitrajaya Sdn Bhd.

Of the 18 packages, there are eight packages each for elevated civil and station works, and two packages for depot. These packages are divided into two categories – the open category and the Bumiputera category.

The source said tenders for phase two of the KVMRT project will be called in the second half of 2012, also valued at about RM15 billion.

“MRT Corp is trying to finish awarding the jobs within this year. The company is expected to raise bonds soon for the award of some jobs,” the source told Business Times.

MRT Corp, set up under the Ministry of Finance, is the MRT project owner and MMCGamuda KVMRT (PDP) Sdn Bhd is the project delivery partner (PDP).

The MRT, which is expected to cost about RM50 billion, is a proposed electrified passenger rail line running from Sungai Buloh to Kajang that will consist of high capacity trains running on a dedicated electrified track.

The line will start from Sungai Buloh cutting through the Kuala Lumpur city centre to Kajang in a distance of 51km, comprising a 9.5km underground tunnel between Jalan Semantan to Maluri. 

The KVMRT Sungai Buloh-Kajang line is set to be completed by July 2017.

Business Times reported late last year that there are five contenders for the underground tunnelling works worth an estimated RM9 billion to RM12 billion.

They are Gamuda-MMC Corp, Gadang-Hyundai, China’s Sinohydro Group, China Railway Corp and Japan’s Taisei Corp.

The source said MRT Corp is likely to spend around RM10 billion for system works and rolling stocks.

Three-way fight for DBE Gurney?

By Sharen Kaur
sharen@nstp.com.my
Published in NST on January 25, 2012

KUALA LUMPUR: Three parties are interested to take over DBE Gurney Resources Bhd, a poultry breeder, in a bid to return the company to profitability, people familiar with the matter said yesterday.

Business Times understands that besides CI Holdings Bhd, the other parties interested in DBE are Datuk Raymond Chan Boon Siew, the controlling stakeholder of Sagajuta (Sabah) Sdn
Bhd, and Maybank Private Equity.

Chan, a prominent Sabah developer, has been buying shares in DBE from the open market and now controls about 4.0 per cent stake of the company.

DBE closed at 12.5 sen, 1 sen down on volume of 1.693 billion shares last Friday.

To recap, Chan’s Sagajuta rose to prominence after it was linked to a reverse takeover of Jerneh Asia Bhd, which is 37 per cent owned by Robert Kuok. 

The talks in the end fell through due to a disagreement over definitive terms.

There has been speculation that since then, Chan has been looking for another listed vehicle to inject his assets.

Last November, Chan emerged as a substantial shareholder in Harvest Court Industries Bhd with a 13.85 per cent stake in the company.

Chan and off icials from Maybank Private Equity were not available for comment.

Me a nwh i l e , speculation has been rife that CI Holdings, which is now cash-rich, is keen to buy DBE to create a new core business.

CI Holdings is on the prowl for new businesses after selling food and beverage arm Permanis Sdn Bhd to Japanese Asahi Group Holdings Ltd for RM820 million last year.

When contacted by Business Times last Wednesday, CI Holdings group managing director Datuk Johari Abdul Ghani denied that he, or CI Holdings, is talking to DBE to buy into the company .

But DBE told Bursa Malaysia a day later that it is in discussion with a shareholder of CI Holdings which is at preliminary stage.

A local daily reported around the same time that CI Holdings will pay RM40.4 million, equivalent to RM0.20 per share, to acquire a 30 per cent equity stake in DBE. After selling Permanis, it is reported that CI Holdings may be looking to buy a business in the food industry.

Its other business, which is the sanitary division, is only contributing 7 per cent to its earnings. 

Deal opens up new global marts for Khazanah

By Sharen Kaur

sharen@nstp.com.my

Published in NST on January 25, 2012

KHAZANAH Nasional Bhd, via its healthcare unit Integrated Healthcare Holdings Sdn Bhd (IHH), will enter new markets like the Middle East, Eastern Europe and Russia in a bid to become the world’s largest healthcare service provider.

Khazanah’s existing portfolio of healthcare assets through IHH includes Parkway Holdings Ltd, Pantai Holdings Bhd and International Medical University.

IHH has presence in Malaysia, China, India and Singapore. In India alone, it has an 11.2 per cent stake in Apollo Hospitals.
The government investment arm has, via IHH, acquired 60 per cent of Acibadem Saglik Yatirimlari Holding A.S. (ASYH) from Acibadem

Group founder and chairman Mehmet Ali Aydinlar and his family, and from Abraaj Capital, a leading private equity manager.

Khazanah also bought another 15 per cent direct stake in ASYH from another party.

ASYH owns 92 per cent of Acibadem Saglik Hizmetleri ve Ticaret A.S, a leading private healthcare service provider in Turkey,
with 14 hospitals and nine outpatient centres in its portfolio.

“This is not structured as a one-off deal but an opening of a new chapter between all the parties concerned,” said Khazanah managing director Tan Sri Azman Mokhtar at the exchange of documents here yesterday, in conjunction with the completion of the Acibadem acquisition.

The acquisition was paid by a combination of cash and newly-issued IHH shares, in a deal worth about RM3.7 billion.

The Aydinlar family and Abraaj Capital have emerged as shareholders of IHH, with 4.2 per cent and 7.1 per cent stakes respectively.

Aydinlar and Omar Lodhi of Abraaj will sit on the board of IHH.

Khazanah, via its wholly-owned special purpose vehicle (SPV) Pulau Memutik Ventures, will retain a 62.1 per cent stake in IHH, while Mitsui Co via its SPV, MBK Healthcare Partners Ltd, will own a 26.6 per cent stake.

Aydinlar told reporters at a press conference that Acibadem is looking at expanding its business worldwide, especially in the Middle East, Eastern Europe and Russia.

“We are currently among the largest healthcare providers in the world in terms of revenues and the number of beds. 

Together with Khazanah and the other parties we will aim for greater heights,” he said.

Plan to privatise KTMB on track

By Sharen Kaur
sharen@nstp.com.my
Published in NST on January 12, 2012
KERETAPI Tanah Melayu Bhd (KTMB) has been asked to assist MMC Corp Bhd to conduct due diligence on the national railway company starting this month, said its president Dr Aminuddin Adnan.

The due diligence is important for MMC to decide if it wants to privatise KTMB.

Business Times reported in December 2011 that MMC plans to pump in some RM1 billion into KTMB and take over its operations.

Aminuddin told Business Times that the process by MMC to take over KTMB’s operation is on going.

“MMC sent us a letter stating that they want to start the due diligence this month and we have been asked to assist them. Other than that, we have not received any instructions from the government to put the matter on hold,” he said.

Speculation is rife that the government is planning to put the plan on ice following protest by the Railwaymen’s Union of Malaya (RUM).

RUM is worried that MMC’s takeover of KTMB would see many of its 5,500 workers retrenched, if it came to pass.

Aminuddin said MMC is expected to come up with a proposal on its plan for KTMB based on the due diligence, which is likely to take six months to complete.

“We look forward to the deal if it makes sense for KTMB. It will all depend on MMC’s proposal and how they are going to increase the value and turn around the company,” he said.

Aminuddin estimates that it may take up to 18 months or more before the operations of KTMB can be handed over to MMC, given the complexity involved.

He said the government will take a few months to evaluate the proposal and talk to the stakeholders and the people involved in the matter, and study the impact on the train services.

RUM president Abdul Razak Md Hassan still maintains that it won’t be right on KTMB to hand over its operations to a private party.

“KTMB is for the rakyat and should remain as it is today, or returned to the government if necessary. If given to a private party, we can expect the fare of the commuter trains to increase.


“Currently, it is within the affordable range, compared with travel on the ERL, PUTRA, STAR and Monorail,” he said via a telephone interview.

According to Abdul Razak, it costs 70 sen to 80 sen for each kilometre travelled on the commuter train and more than RM1.00 on the ERL, PUTRA, STAR and Monorail.

Gemas-JB rail job winner to emerge in March

By Sharen Kaur
sharen@nstp.com.my
Published in NST on January 4 2012

The winner for the contract to build the Gemas-Johor Baru electrified double-track railway line will only be known in March, government sources said.


Three Chinese companies were earlier shortlisted for the RM8 billion project known as the Gemas-Johor Baru Electrified Double Tracking Project (EDTP).

They are China Railway Engineering Co (CREC), China Railway Construction Co (CRCC) and China Communication Construction Co (CCCC). The three are subsidiaries of China’s Ministry of Railway.

The Ministry of Transport said recently the rail link was still in the design process and its minister, Datuk Seri Kong Cho Ha said he was not aware of any contract being awarded yet despite unconfirmed news saying the government has decided winner of the tender.

The Gemas-Johor Baru project includes the building of 197km of parallel railway tracks, stations, depots, halts, yards and bridges and covers systems such as electrification, signalling and communications.

The rail project would be the final link in the EDTP with the other links being the Ipoh-Padang Besar and Seremban-Gemas railway line.

Beijing-based CREC was given a letter of intent (LOI) for the southern sector by the Malaysian government on a G-to-G deal in 2004, in exchange of palm oil and offshore financing by the Chinese government.

India’s Indian Railway (Ircon) was given the LOI for the northern sector from Ipoh to Padang Besar.

However, because of the economic crisis in 2007, the Malaysian government withdrew both the LOIs.

The government later awarded the Ipoh to Padang Besar contract to Gamuda-MMC JV at RM12.45 billion through a direct negotiation basis.

In 2008, Ircon was given the southern sector from Seremban to Gemas for RM3.45 billion.

During several recent visits by Prime Minister Datuk Seri Najib Razak to China, he had declared that the sector between Gemas and Johor Baru will be given to a Chinese company.

As Malaysia was no longer entitled to Chinese government soft loan financing, the Malaysian government decided to award the contract based on restricted closed invited tender.

According to a source, CREC, CRCC and CCCC were recommended to be given approval to participate in the invited tender, which is expected to be called in this month.

It was also suggested that based on bilateral relations with China, one of the Chinese companies will be selected for direct negotiation based on its local company participation.

"CREC would be the favourite to win as it is the initial party appointed by China and has spent some RM10 million during 2004 before the project was cancelled.

"The key local company involved will be the main selection criterion by the government," the source said.