Brahim's turns around LSG Sky Chef-Brahim's

By Sharen Kaur

sharen@nstp.com,my

Published in NST on October 29, 2012

PROFITABLE NOW: Group hopes to wipe out losses of the company it acquired in 2003 by the end of this year BRAHIM'S Holdings Bhd hopes to wipe out the RM170 million accumulated losses incurred by MAS Catering Sdn Bhd when it took over the business in 2003 by the end of this year, its chief said.

"We have turned around the operation and it is a profitable business now. Going forward, after settling the losses, we expect earnings to grow substantially," said Brahim's group executive chairman and major shareholder, Datuk Ibrahim Ahmad Badawi.

Malaysia Airlines (MAS), which owned MAS Catering, had incurred losses to the tune of about RM200 million from the business with negative shareholders' funds of about RM80 million.

The government (at that time) under Tun Dr Mahathir Mohamad's administration had proposed that MAS stick to its core business of operating an airline and hive off the loss-making catering business.

Brahim's, manufacturer of famous household brand, Brahims, came in with a proposal and landed the deal to acquire 70 per cent of MAS Catering, now known as LSG Sky Chef-Brahim's Sdn Bhd (LSGB), from MAS in 2003.

The stake was acquired by Brahim's-LSG Sky Chefs Holdings Sdn Bhd (BLSG), in which Brahim's owns 51 per cent while LSG Asia GmbH, the catering arm of Lufthansa AG, with 49 per cent.

"Besides taking over the accumulated losses, we paid RM175 million upfront to take over the business. It was a rescue operation. We are now investing RM5 million to RM6 million a year to grow the business," Ibrahim told Business Times in an interview.

He said that Brahim's hopes to maintain its 15 per cent net profit margin from the catering business, despite increasing cost of raw materials and logistics.

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

LSGB, which operates the in-flight catering business, has a 25-year concession from 2003 to provide catering and related services to MAS at Kuala Lumpur International Airport (KLIA) and the Penang Airport.

Besides MAS, it also caters for 35 other airlines that land at the KLIA. The company's operation in Penang caters to 10 airlines.

Brahim's now plans to acquire LSG Asia's 49 per cent stake in BLSG for RM130 million and hopes to conclude the deal by the end of this year after getting approval from shareholders at an extraordinary general meeting on December 5.

The acquisition would make Brahim's the sole owner of the 70 per cent stake in LSGB, with MAS maintaining its 30 per cent share.

"Malaysia Airports Holdings Bhd is projecting around six per cent growth in passenger movement at the KLIA this year. We are expecting reasonable growth in the aviation industry and airline catering," Ibrahim said.

DRB-HICOM expected to partner Mitsubishi

By Sharen Kaur
sharen@nstp.com.my
Published in NST on October 29, 2012

DRB-HICOM Bhd is expected to partner Japan's Mitsubishi Heavy Industries Ltd to help lay railway tracks for Line 1 of the Klang Valley Mass Rapid Transit project.

Last Monday, Mitsubishi Heavy Industries won a RM855 million contract from Mass Rapid Transit Corporation Sdn Bhd (MRT Corp) to lay railway tracks for Sg Buloh-Kajang line for the project.

The award of the contract is the first win for Mitsubishi in the Klang Valley Mass Rapid Transit project.

DRB-HICOM's track record with railway jobs includes the RM4.6 billion Rawang to Ipoh electrified double-tracking project awarded to the company in 2000.

The project is part of government efforts to electrify and double-track the country's railway, enabling trains to run at a maximum speed of 160kph.

The government, however, had in mid-May 2005 terminated the contract with DRB-HICOM.

The reason was because the 182km was 17 months behind schedule and had exceeded the budget.

DRB-HICOM is looking to bid for the Gemas-Johor electrified double-tracking project.

The government has not indicated when the project will start.

ECM Libra Research is maintaining its "buy" call on DRB-HICOM shares, with a target price of RM3.45.

DRB-HICOM is expected to receive a net gain of RM446.2 million from the sale of the entire business of Hicom Power Sdn Bhd, including all of its assets and liabilities to Sterling Asia Sdn Bhd, a unit of Malakoff Power Bhd.

For the financial year ended March 31 2012, DRB-HICOM's earnings rose 173.6 per cent to 1.29 billion, from RM472.46 million in fiscal 2011. Its revenue increased by one per cent to RM6.88 billion.

The stock close closed seven sen higher on Thursday at RM2.47.

Mitsubishi Heavy Industries is a Japanese multinational engineering, electrical equipment and electronics company headquartered in Tokyo.

Earlier this month, it won a bid with Sumitomo Corp worth about 21 billion yen (RM800 million) for the electrification and double-double tracking project of a main railway line in Jakarta, Indonesia.

Slew of projects will keep Sabah economy robust

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

KUALA LUMPUR: Sabah's economy will remain robust with more projects coming up in the oil and gas (O&G), oil palm, construction and tourism sectors, businessman Tan Sri Megat Najmuddin Megat Khas said.

In the O&G sector for example, Petroliam Nasional Bhd (Petronas) plans to invest around RM45 billion in the upstream and downstream activities, following the discovery of new gas fields offshore.

The federal government is spending several billion ringgit on infrastructure development and tourism, he added.

Megat Najmuddin - who sits on the board of Petronas, Formis Resources Bhd, Tradewinds Corp Bhd and MajuPerak Holdings Bhd is bullish that the local economy will continue to be strong, attracting local and foreign investors.

"Despite being in backwaters, Sabah's gross domestic product (GDP) for the worst two years of the global crises in 2008 and 2009 has been strong, at 7.7 per cent and 3.3 per cent.

"Going forward, the state's GDP is projected to be above seven per cent per annum for the next few years," he said on Tuesday, after the launch of Imago, a retail mall project in Kota Kinabalu by Asian Pac Holdings Bhd.

Megat Najmuddin, who is chairman of Asian Pac, said investors can no longer ignore Sabah.

He added that well-planned developments will also be sought after as the Sabahans now have higher disposable income.

Imago is part of Phase 2 of the on-going KK Times Square project by Asian Pac, its flagship integrated development in Kota Kinabalu.

Phase 2 includes The Loft Residences, comprising 631 units of serviced apartments. So far, Asian Pac has launched 531 units and 65-70 per cent have been sold.

The company will be launching the final 100 units next month, ranging between RM700,000 and RM2.5 million.

KK Times Square, which is being developed at a cost of RM565 million comprising 12 blocks of 5-8 storey signature offices, was first built in 2007.

Megat Najmuddin said the price for the signature offices had gone up steadily in the last five years.

Daewoo E&C wins DCSB's US$177m job

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

KL LANDMARK: South Korean giant to begin superstructure works on commercial complex in Damansara next month

DAEWOO Engineering & Construction Co, South Korea's third-largest builder, has won a US$177 million (RM538 million) contract to build a large-scale commercial complex in Kuala Lumpur.

The contract was awarded by Damansara City Sdn Bhd (DCSB), a subsidiary of GuocoLand (Malaysia) Bhd, which in turn is the property arm of the Hong Leong Group.

This is the second job here for Daewoo E&C in over a month.

Last month, Naza TTDI Sdn Bhd, the property arm of Naza Group, awarded Daewoo E&C a contract worth RM555.9 million to build the new Matrade Exhibition Centre in Kuala Lumpur.

DCSB is developing Damansara City, a flagship integrated development of GuocoLand in Damansara Heights.

Damansara City is one of the key entry point projects under the Economic Transformation Programme to transform Malaysia into a high-income nation by 2020.

The development has been identified by the government as a key catalyst to drive rapid growth in Greater Kuala Lumpur/Klang Valley, which is one of the 12 National Key Economic Areas laid down in the 10th Malaysia Plan.

Damansara City entails the development of two Grade A office towers, two luxury condominium towers, a lifestyle mall and an international-class hotel.

The project, located adjacent to the Damansara Town Centre, will be developed on a prime freehold site of 3.4ha with a total development area of about 2.2 million sq ft.

Daewoo E&C said in a statement it will commence superstructure works next month and complete the entire scope by mid-2015.

Foreigners snapping up Malaysian properties

By Sharen Kaur

sharen@nstp.com.my

Published in NST on October 26, 2012

Influx of investors: They are still buying properties worth over RM1 million because they have the money

THERE is an influx of investors from China, Hong Kong, Japan, Singapore and South Korea buying residential properties here, says PropertyGuru.com.my head of marketing Jason Thoe.

They are buying the properties for their own stay or as an investment, and their targets are Klang Valley, Penang, Johor and Sabah, he said.

There is concern now of rising property prices. In the last two to three years, property prices have risen by 10 per cent to 30 per cent, mainly in Kuala Lumpur and Penang.

The myth faced by the property sector is complaints of houses being overpriced because of higher foreign ownership and speculation.

But according to Rehda (Real Estate and Housing Developers’ Association of Malaysia), only less than two per cent of local residential properties are owned by foreigners, and the majority are located in the Kuala Lumpur city centre.

To prevent a property bubble, the government said it is raising the threshold price of residential properties for foreigners from RM500,000 to RM1 million.

“That is not going to change anything. Foreigners are still buying properties worth over RM1 million. They are buying because they have the money,” Thoe told Business Times yesterday at the launch of PropertyGuru’s property showcase.

On the outlook for 2013, he said there will be higher transactions for properties priced below RM700,000, especially apartments and condominiums.

“The new hot spots will be Seri Kembangan and Kajang because of the infrastructure development. Developers with reputable brands will have a good following.

“The secondary market in some areas in Klang Valley will also experience growth as first-time property buyers look for affordable terrace houses priced RM800,000 and below,” he said.

Thoe said Iskandar Malaysia, George Town and Kota Kinabalu are also experiencing higher property transactions.

“Property prices in Kota Kinabalu have been increasing steadily in the last 10 years.

Developers there are launching properties priced around RM1,300 per sq ft, almost on par with Petaling Jaya. The buyers are mainly Sabahans,” he said.

On the property showcase,Thoe expects the 13 participating developers to generate more than RM15 million in sales collectively. They include UEM Land, Country Heights, Andaman, Land & General and Naza TTDI whereby properties are priced between RM400,000 and above RM1 million.

This is PropertyGuru’s second major property showcase for the year. The first was held in Penang last week where seven developers generated a combined sales of RM14.2 million from the three-day event.

Global catering industry to grow at slower pace

By Sharen Kaur
sharen@nstp.com.my
Published in NST on October 26, 2012
 
KUALA LUMPUR: The global catering industry is estimated to worth between STG8 billion and STG10 billion (RM39.12 billion and RM48.9 billion) currently and will grow annually, albeit at a slower pace, said an established professor.

Professor Peter Jones, who is also a hospitality educator and researcher, said there are several challenges slowing the growth of the industry.

"The market for all businesses today is becoming increasingly volatile due to climate change, food scarcity and terrorism. The aviation industry is also becoming less profitable.

"This is the downside for the airline catering point of view. All these will have an impact on their business," he said.


The International Air Transport Association (IATA) forecast global profits by airline companies for 2013 rising modestly to US$7.5 billion (RM22.89 billion), on the back of a net margin of just 1.1 per cent.

Jones, however, is upbeat on the future outlook of the industry as the number of existing aircraft globally will increase by twofold to 35,000 units, in the next 20 years.

Some 300-odd new routes will also be added to the current worldwide destinations, he said yesterday, at a seminar entitled "issues and challenges in airline catering", organised by Brahim's-Dewina Group.

"There will be more larger aircraft like the Boeing 747-830. This means passenger volume will grow, thus the need for more food. Smaller planes will start to disappear. The landscape for the aviation and catering industries will change," Jones said.

Brahim's clarifies MAS request

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

MALAYSIA Airlines (MAS) has requested that Brahim's Holdings Bhd offer higher quality food served in-flight, in line with its aim to become the world's five-star value carrier (FSVC).

MAS' newly-acquired A380, the biggest commercial plane, will pave the way towards attaining the FSVC status.

With new and bigger aircraft, MAS wants to ensure that food served on all its flights, including the older aircraft, meet international standards and customer expectation, said sources close to the national airline company.

MAS has implemented a strategy to transform itself into an FSVC in a bid to become profitable. The five steps that make up the FSVC virtuous cycle of profitable growth include reducing structural and operational costs, providing competitive fares, network building, and offering high quality products and services.

Brahim's group executive chairman Datuk Ibrahim Ahmad Badawi clarified that this was among the issues MAS raised in a letter to LSG Sky Chef-Brahim's Sdn Bhd (LSGB) in its intention to renegotiate the terms of the catering agreement.

"After clarifying with MAS, we were told that it wants the food served in-flight to have an impact on passengers, and for LSGB to offer a variety of cuisine to meet customer demand. MAS is not cancelling the catering agreement," Ibrahim said.

LSGB, which operates the in-flight catering business, has a 25-year concession starting 2003, to provide catering and related services to MAS at Kuala Lumpur International Airport (KLIA) and the Penang airport.

LSGB is 70 per cent own by Brahim's-LSG Sky Chefs Holdings Sdn Bhd (BLSG) and 30 per cent by MAS. BLSG is 51 per cent owned by Brahim's and 49 per cent by LSG Asia GmbH, which is owned by Deutsche Lufthansa AG.

Brahim's is proposing to buy LSG Asia's stake in BLSG for RM130 million cash but shelved the plan in September, as it was seeking clarification from MAS on what it meant by the term "renegotiate".

"MAS has clarified and given us the approval to acquire the remaining shares in BLSG," Ibrahim said, adding that he expects to conclude the acquisition by end of December this year.

Ibrahim was speaking after a seminar on "Issues and Challenges in Airline Catering" by Professor Peter Jones. The seminar was organised by Brahim's-Dewina Group.

He said Brahim's will hold an extraordinary general meeting (EGM) early next month for shareholders approval. The EGM held in September was adjourned to consider the viability of the proposed acquisition.

"With full ownership of BLSG, we will have better control over the operation," Ibrahim said.

Investors show approval for UEM Land deal

By Sharen Kaur

sharen@nstp.com.my

Published in NST on October 25, 2012

KUALA LUMPUR: UEM Land Holdings Bhd's shares rose 22 sen, or 11.4 per cent, to close the trading day at RM2.15 a share, as investors gave their seal of approval to its latest deal.

UEM Land had on Tuesday signed an agreement with Singapore's Ascendas Land International Pte Ltd to jointly develop a US$1.23 billion (RM3.76 billion) technology park project in Johor.

Analysts were generally upbeat on the project, which is part of the larger Gerbang Nusa development, that has an estimated gross development value of RM18 billion.

However, they are maintaining their earnings forecast and target price on the stock as the project will only be commencing at the end of 2013.

The 210-hectare project, located within the economic region of Iskandar, will cater to businesses in electronics, pharmaceuticals, medical devices, food processing and precision engineering.

The proposed development is expected to take place in three phases over nine years.

"Phase 1 will only start by end-2013. This means earnings will flow in much later, like in fiscal 2014 and onwards," said a property analyst at MIDF Research.

MIDF is maintaining its valuation on UEM Land, with a target price of RM2.46 and net profit earnings of RM340 million this year, and around RM380 million in fiscal 2013.

Hong Leong Investment Bank Research also maintained its "hold" rating on UEM Land, retaining its target price on the stock at RM2.04

An analyst from OSK Research said it may revise its target price and earnings forecast on UEM Land, once details on the project are more firm.

"Right now all the management is saying that the project will start by the end of next year. Anything could happen between now and then. Until things are more certain, we will maintain our earnings forecast on UEM Land," he said.

He added that the interest in UEM Land yesterday was probably because of its partner, Ascendas.

UEM Land Bhd, a wholly-owned subsidiary of UEM Land, will have a 40 per cent stake in the technology park project with Ascendas holding 60 per cent.

Ascendas, a developer and manager of industrial properties across Asia, is a unit of Jurong Town Corp, a Singapore government body.

Asian Pac eyes RM45m revenue from Imago

By Sharen Kaur
sharen@nstp.com.my
Published in NST on Oct 24, 2012

KUALA LUMPUR: Asian Pac Holdings Bhd, a property developer and investment group, expects to generate annual revenues of around RM45 million from Imago, its new retail mall in Kota Kinabalu, Sabah.

The 800,000 sq ft mall is part of Asian Pac's KK Times Square integrated development, which includes signature offices and The Loft residences.

The mall will be co-leased by CB Richard Elis (Malaysia) Sdn Bhd and it is expected to be fully taken up by the end of next year, said Asian Pac chairman Tan Sri Megat Najmuddin Megat Khas.

Imago comprises 300 retail, catering, lifestyle and entertainment outlets. It is earmarked to be completed by the fourth quarter of 2013.

Megat Najmuddin said there will be mixed tenancy for Imago, featuring premium luxury outlets, fast-moving fashion houses, household stores, lifestyle and entertainment centres.

Parkson will be the anchor tenant with a retail space of 140,000 sq ft spread over three floors of shopping.

"All the retail lots will be leased, so we can better control the tenancy mix. With Imago, we are sure Sabah will reach higher standards in terms of retail, lifestyle and living," he said.

Megat Najmuddin said the mall will cater to 400,000 people in nearby areas, which fall in the middle to upper class brackets with average household income starting from RM4,500 a month.

He said 70-80 per cent of the targeted revenue will be locally derived and the rest from Asia and the Middle East.

"We have done our math to ensure the success of Imago. Our studies show that the potential retail spend by locals is anticipated to be RM1.38 billion annually.

"Sabah, being Malaysia's largest tourist destination, is expected to attract 2.93 million tourists per annum, with RM7.32 billion in tourist dollars. We see great potential in Imago," Megat Najmuddin said.

Imago, when fully developed, will be the first of its kind non-strata fully leased mall in Sabah, but it will not be the biggest.

The current largest lifestyle mall in Sabah is 1Borneo, with 1.5 million sq ft of retail space.

Mitsubishi bags RM855m job to lay tracks for MRT

By Sharen Kaur
sharen@nstp.com.my
Published in NST on Oct 22, 2012

JAPAN'S Mitsubishi Heavy Industries, Ltd has won a RM855 million contract to lay railway tracks for the Sg Buloh-Kajang (SBK) Line of the Klang Valley Mass Rapid Transit (KVMRT) project.

The contract was awarded by Mass Rapid Transit Corporation Sdn Bhd (MRT Corp) after a sitting of the One Stop Procurement Committee (OSPC) in Parliament yesterday, chaired by Prime Minister Datuk Seri Najib Razak.

This confirms a Business Times report that Mitsubishi will be awarded the contract to lay railway tracks for Sg Buloh-Kajang line for the project.

Mitsubishi was among three shortlisted bidders for the job. The other two parties were Balfour Beatty Rail Sdn Bhd and Leighton-Lion Pacific.
The award of the contract is the first win for Mitsubishi in the KVMRT project.

MRT Corp also awarded a RM319.9 million telecommunications work package to the Apex Communication Sdn Bhd- LG CNS consortium.

This is the third job for Apex, which is founded by businessman Tan Sri Abdullah Ali, for the KVMRT project.

Earlier this month, Apex, which is involved in construction, development and telecommunications work, won a RM251.7 million job to build stations at Saujana Impian, Bandar Kajang and Kajang.

In August, the company won the S7 package to build stations in Balakong and Taman Koperasi, worth RM104.7 million.

In a statement, MRT Corp chief executive officer Datuk Azhar Abdul Hamid expressed his confidence that the winning bidders will deliver as per specification.

"The best evaluated tenders won today (October 22), and not without merit. Both companies have demonstrated their capability in the respective fields. I am confident they will be able to deliver, and this will augur well for the SBK Line," he said.

Azhar said the MRT project has already been in full construction mode since August.

So far, MRT Corp has awarded 50 of the 85 works packages, with a total value of RM19.7 billion. The balance 35 packages, with contracts valued at around RM2 billion, are expected to be fully awarded in the current quarter.

Tenders for Line 2, Line 3 may be called by end-2013

By Sharen Kaur
sharen@nstp.com.my
Published in NST on October 19, 2012

KOTA DAMANSARA: Mass Rapid Transit Corp Sdn Bhd (MRT Corp) expects to call tenders for the Klang Valley MY Rapid Transit (MRT) Line 2 (Circle Line) and Line 3 packages by the end of 2013.

MRT Corp strategic communications director Amir Mahmood Razak said firms that previously won contracts for Line 1 from Sungai Buloh to Kajang can bid for the packages.

"If the contractors have been pre-qualified for Line 1, they should have no problems bidding for Line 2 and 3," Amir said yesterday after announcing the start of the viaduct work package by Gadang Engineering (M) Sdn Bhd.

The MRT Line 2 and 3 are currently under final planning and evaluation.
Amir said the government will announce the alignment and station locations in the first half of next year, after which, there would be three months of public display for feedbacks.

"We are not sure how much it would cost to build Line 2 and 3. We will have an idea once we know where the alignments run, the geographic's of it and the number of stations required," Amir said.

"The government is still conducting studies. If the new lines are announced by early next year, we will be able to award some of the contracts by end-2013. That would be a fair estimate," Amir said.

The MRT project comprising Line 1, 2 and 3 fall under the Greater KL/Klang Valley Land Public Transport Master Plan.

While Line 1, which runs 51km, will be operational by 2017; Line 2 and 3 are expected to be completed by 2020. Together, the three will extend the MRT network track to 150km, serving an estimated of 10 million people in Greater Kuala Lumpur.

Based on the master plan, Line 2 would cater for orbital movements in Kuala Lumpur, covering hotspots at KLCC, Jalan Bukit Bintang, Tun Razak Exchange (TRE) and KL Metropolis at Jalan Duta.

Line 3 would cover areas between Kota Damansara and Cheras, including Sungai Buloh, Kepong, Selayang, Kampung Baru and TRE.

Meanwhile, Gadang Engineering is expected to complete the viaduct work package, involving 5.14km of alignment works from Taman Industri Sungai Buloh to Dataran Sunway, by February 2016.

The company was awarded the job worth RM863.4 million in June. The contract includes building three MRT stations.

Sungai Buloh-Kajang MRT: Project will not exceed RM40b

By Sharen Kaur
sharen@nstp.com.my
Published in NST on October 19, 2012

THE cost of the Sungai Buloh-Kajang MY Rapid Transit (SBK MRT) project will not exceed the RM40 billion mark, says Mass Rapid Transit Corp Sdn Bhd (MRT Corp) strategic communications director Amir Mahmood Razak.

The final value of the 51km SBK MRT Line 1 will be determined by the end of this year, when all the 85 contracts are awarded.

So far, MRT Corp has awarded 47 packages worth around RM20 billion. Between now and December 31 this year, it will award 38 new contracts worth a combined RM2 billion.

An initial estimate for the SBK MRT project was pegged at around RM37 billion. Speculation has been rife that the project cost would go up to as high as RM50 billion.

"The 85 packages add up to around RM22 billion. If you include other costs like land acquisition and compensation, it will be less than RM40 billion and not as speculated," Amir said.

"The remaining 38 packages are smaller jobs, except for the contract to lay tracks," Amir told Business Times yesterday, after announcing that Gadang Engineering (M) Sdn Bhd had started work for the viaduct work package.

Business Times reported recently that MRT Corp is expected to award soon several contracts worth around RM1.2 billion, namely to lay railway tracks and supply the platform screen door system, among others.

It is understood that the contracts will be announced on Monday, after a sitting of the One-Stop Procurement Committee in Putrajaya, to be chaired by Prime Minister Datuk Seri Najib Razak or Second Finance Minister Datuk Seri Ahmad Husni Hanadzlah.

TM come a-calling for P1

By Sharen Kaur and Francis Fernandez

Published in NST on October 19, 2012

Telekom Malaysia Bhd, the country's biggest phone company, is seeking approval from the Finance Ministry to make a RM1.8 billion bid for Green Packet Bhd's wireless broadband unit, Packet One Sdn Bhd (P1). Business Times understands that the company sought the approval yesterday.

Green Packet is the first company to launch commercial WiMAX services in Malaysia via P1.

Thus far, YTL Corp's Yes mobile and U Mobile, a company linked to Tan Sri Vincent Tan, have also been touted as possible suitors of P1.

Speculation has been rife that Green Packet is looking to dispose of P1 but the company was noncommital in a statement to the stock exchange on Wednesday.

But late yesterday, Green Packet came out with another reply.

This time, it told Bursa Malaysia that it is exploring strategic alternatives for P1, including the possibility of a merger, consolidation, sale of stake and other options to maximise shareholders' value.

"To date, we have not received any bids to purchase our shareholdings in P1," Green Packet added.

However, an influential shareholder of Green Packet told Business Times that selling P1 will be of strategic interest.

The shareholder also confirmed that the company has received several offers for P1.

Business Times understands that P1 - a converged telecommunications, broadband and 4G service provider - has invested more than RM1.2 billion to expand its network.

The investment begun in 2007 when P1 became one of four companies awarded 2.3 GHz spectrum licences by the government to deploy 4G WiMAX services nationwide.

Launched in August 2008, P1 represents the first large-scale commercial deployment of mobile WiMAX in Southeast Asia.

But as a result of the investments, Green Packet has been bleeding red ink for the past five years.

The company last registered a net profit in 2007, when it posted a RM27.16 million gain. For the six months ended June 30 2012, it suffered a net loss of RM168.22 million.

P1 has 400,000 subscribers for its fixed, wireless broadband and fibre optics services, giving it a 34 per cent broadband market share as at end of March this year.

The company is expecting to achieve 500,000 subscribers by year-end.

Glomac on merger and acquisition trail

By Sharen Kaur
sharen@nstp.com.my
Published in NST on October 17, 2012

This may involve acquiring smaller real estate firms and Malaysian boutique developers

KUALA LUMPUR: Glomac Bhd, a medium-size developer, is seeking mergers and acquisitions (M&A) as part of its growth strategy.

Group managing director and chief executive officer Datuk FD Iskandar Mansor said Glomac is on new growth phase and will look at M&A as one of its avenues for expansion.

This may involve acquiring smaller real estate firms and local boutique developers, he added.

"For now, we are looking at acquiring land in Greater Kuala Lumpur and elsewhere like Johor.

"Iskandar is a hot market now. Even Penang is relatively hot. We will go where there is demand. Right now, Klang Valley has the strongest demand," Iskandar said.

Glomac, which has a market capitalisation of around RM600 million, has some 400 hectares with expected RM7 billion in gross development value (GDV) over the next seven to eight years.

The company is planning to launch new projects with GDV of RM1.13 billion in its current financial year ending April 30 2013.

Iskandar expects Glomac to achieve record sales for the rest of its current fiscal year, led by Glomac Damansara, Lakeside Residences, Bandar Saujana Utama and Saujana Rawang.

For the first quarter ended July 31 2012, Glomac recorded new sales of RM212 million, 100 per cent more than the same quarter last year. Its unbilled sales was another record high of RM763 million.

"It will keep on improving thanks to all our existing projects. We will also see improvements in earnings, moving on to 2013," Iskandar said after its shareholders' meeting yesterday.

Glomac posted a strong first quarter net profit of RM21 million, a 17.3 per cent gain compared with the same period last year. Revenue for the quarter under review rose 26.1 per cent to RM161.1 million.

Iskandar is also upbeat on the property market.

"There was turbulence in the first two months of this year because of Bank Negara Malaysia's ruling but things have improved. As long as domestic demand is strong, the market will be stable," he said.

"We see stronger demand for residential landed properties now. When we launched Phase One of our RM2 billion Glomac Puchong, all the units were snapped up within two hours," he added.

Phase One comprised 105 units of double-storey terrace houses with GDV of RM75 million, or around RM700,000 each.

Green Packet hits 5-month high on asset sale talk

By Sharen Kaur
sharen@nstp.com.my
Published in NST on October 17, 2012

KUALA LUMPUR: Green Packet Bhd, the first company to launch commercial WiMAX services in Malaysia, rose to its highest level in five months, on speculation that the company might hive off certain assets of its unit Packet One Networks (P1).

P1 is a converged telecommunications, broadband and 4G service provider.

P1 was one of four companies awarded 2.3 GHz spectrum licences by the government to deploy 4G WiMAX services throughout Malaysia in 2007.

As at end March this year, the company had some 400,000 subscribers, giving it 34 per cent of the country's broadband market share.

An influential shareholder of the company speaking strictly on condition of anonymity told Business Times that the company has received a lot of offers to buy the P1 business.

"Selling it would be a strategic move," said the shareholder.

Green Packet last posted a net profit in 2007, when it registered a RM27.16 million gain. For the six months ended June 30 2012, it suffered a net loss of RM168.22 million.

Despite being a loss-making entity, investor appetite for Green Packet shares soared yesterday.

Some 32 million shares exchanged hands, as the shares rose 11.5 sen to close the trading day at 55.5 sen a share.

Interestingly, on Tuesday last week, Green Packet shares slumped to its lowest close of 40.5 sen a share in 52 weeks.

DRB-HICOM frontrunner for MRT track job

By Sharen Kaur
sharen@nstp.com.my
Published in NST on October 16, 2012

The contract for track laying works had three shortlisted bidders including Balfour Beatty Rail Sdn Bhd and Leighton-Lion Pacific.

KUALA LUMPUR: DRB-HICOM Bhd is tipped to win this week a contract worth between RM800 million and RM900 million to lay railway tracks for the Sungai Buloh-Kajang MY Rapid Transit (SBK MRT) project, people familiar with the matter said.

Business Times understands that the contract is part of several jobs worth more than RM1.2 billion that Mass Rapid Transit Corp Sdn Bhd (MRT Corp) will be awarding soon.

The contracts will be awarded after a sitting of the One-Stop Procurement Committee (OSPC) in Putrajaya, to be chaired by Prime Minister Datuk Seri Najib Razak or Second Finance Minister Datuk Seri Ahmad Husni Hanadzlah.

The contract for track laying works had three shortlisted bidders including Balfour Beatty Rail Sdn Bhd and Leighton-Lion Pacific.

DRB-HICOM had bid for the job with Mitsubishi Heavy Industries Ltd, a Japanese multinational engineering, electrical equipment and electronics group.

In mid-September, the three bidders were requested by MRT Corp to re-submit their commercial clarification, including the final price, to lay tracks between Sungai Buloh and Kajang, totalling 41.5km.

Although the stretch from Sungai Buloh to Kajang involves 51km, the job excludes the 9.5km underground tunnel work awarded to the MMC Gamuda joint venture at RM8.2 billion.

"MRT Corp has done a thorough evaluation on their respective commercial clarification and the closest to win is DRB-HICOM-Mitsubishi. The final decision will be made by the OSPC," a source said.

The other contract to be awarded by MRT Corp is a job worth around RM100 million for platform screen door system.

The system is to prevent accidental falls off the platform onto the lower track area, reduce wind felt by the passengers caused by the piston effect, and improve security.

Sources said several companies were shortlisted for the job and the frontrunner is Singapore Technologies Electronics Ltd, which is part of Temasek Holdings, Singapore's investment arm.

Read more: DRB-HICOM frontrunner for MRT track job http://www.btimes.com.my/Current_News/BTIMES/articles/20121015234058/Article/index_html#ixzz29NxLcpDK

Dijaya MD to take optional retirement?

By Sharen Kaur

sharen@nstp.com.my

Published in NST on October 5, 2012

PETALING JAYA: Dijaya Corp Bhd managing director (MD) Datuk Tong Kien Onn has decided to take optional retirement after more than 25 years with the property development company.

Business Times understands that Tong, 53, will be replaced by Dickson Tan Yong Loong, 31, who is currently the deputy managing director.

Tan is the son of Dijaya founder and major shareholder, Tan Sri Danny Tan Chee Sing, who is the younger brother of the high-profile Tan Sri Vincent Tan, founder of Berjaya group.

It is unclear when Tong would be leaving the company. He was not available for comment.

Tong and his team, under Danny Tan's leadership, have helped build Dijaya to its current size.
Dijaya gained fame for turning a 260 hectares of secondary jungle in Tropicana into a luxurious gated community, known as Tropicana Golf & Country Resort, where the property value has increased by 10-fold.

The company's market capitalisation is about RM1 billion and Danny Tan is aiming to triple that with a slew of property projects lined up for launching.

"It is the close working relationship that both Tong and Danny Tan have since 1983 that has made Dijaya successful.

"Danny Tan has been instrumental in building Dijaya and giving Tong and his management team the opportunity to help achieve his vision for the company," said a source close to the parties concerned.

Tong joined Dijaya in 1991 as senior finance manager, primarily responsible for the group's finance, accounting and treasury functions.

He was then promoted as general manager of finance and administration in 2000 and to a more senior position in the same year, before being appointed as the executive director in 2002.

Tong was appointed to the board of Dijaya on January 18 2002 and managing director on May 10 2007.

He currently sits on the board of Tropicana Golf & Country Resort Bhd, Berjaya Corp Bhd and several other private limited companies.

Dickson Tan, meanwhile, was named to the board of Dijaya on May 20 2009 and made the company's executive director on April 1 2010.

He was designated as deputy MD of Dijaya on October 8 2010 and is currently overseeing group corporate strategy, planning and risk management of the company.

MRT Corp awards three contracts worth RM732m

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

MASS Rapid Transit Corp Sdn Bhd (MRT Corp) has awarded three contracts worth RM732.2 million to build elevated stations for the Sungai Buloh-Kajang MY Rapid Transit (SBK MRT) project.

This confirms a Business Times report on Monday, which stated that MRT Corp is expected to award several jobs worth over RM1.5 billion soon, including a contract for railway track works.

In a statement yesterday, MRT Corp said the contracts for elevated stations were awarded after a sitting of the One-Stop Procurement Committee in Putrajaya, chaired by Second Finance Minister Datuk Seri Ahmad Husni Hanadzlah.

There was, however, no contract awarded for track works yet, which involves 41.5km of track laying from Sungai Buloh to Kajang.
The job, estimated to worth some RM850 million, is important to support the communication, signalling and power-supply system.

Of the three contracts, Naim Holdings Bhd's wholly-owned unit, Naim Engineering Sdn Bhd, won a RM204.7 million job to build stations at Taman Industri Sungai Buloh, PJU 5 and Kota Damansara.

The second award went to UEM Construction Sdn Bhd to build stations at The Curve, One Utama and Dataran Sunway for RM275.8 million.

Apex Communication Sdn Bhd, founded by businessman Tan Sri Abdullah Ali and is involved in construction, development and telecommunications work, won a RM251.7 million job to build stations at Saujana Impian, Bandar Kajang and Kajang.

MRT Corp chief executive officer Datuk Azhar Abdul Hamid said the contracts were open to 12 Bumipu-tera companies that were pre-qua-lified to bid.

"These awards are the best evaluated bids from the groups which were shortlisted.

"With three more station packages awarded, I'm glad to say the MRT project is progressing very well," Azhar said.

MRT Corp has awarded 48 out of the total 85 packages for the SBK MRT project tender.

Azhar said the three winning companies were the appointed, nominated sub-contractors for the elevated civil work packages held by Gadang Engineering (M) Sdn Bhd, Mudajaya Corp Bhd and UEM Construction Sdn Bhd.

MRT Corp awarded jobs worth RM863.4 million, RM816.2 million and RM951 million, respectively, to Gadang Engineering, Mudajaya and UEM Construction between June and September this year.

Azhar said the pricing of the elevated civil-work package includes the station-building contract.

The SBK MRT is a new rail transport system for the Klang Valley, stretching 51km from the northwest town of Sungai Buloh to the south-east city of Kajang in Selangor.

Dijaya: New projects may fetch up to RM2,500 psf

By Sharen Kaur

sharen@nstp.com.my

Published in NST on October 3, 2012

MARKET TREND: Developer upbeat on W Kuala Lumpur Hotel & Residences project 

  DIJAYA Corp Bhd plans to launch serviced residences in Kuala Lumpur at a whopping RM2,000 per square foot (psf) to RM2,500 psf.

Senior Dijaya Corp officials said such price is now the going rate for new luxury properties in the city centre.

"We are looking at that price range for now. There are some projects launching at RM2,500 per sq ft in the city centre. Since we are launching only next year, we may re-look the pricing then," said its executive director Koong Wai Seng.

Dijaya is developing W Kuala Lumpur Hotel & Residences at the site where the historical Bok House used to sit on Jalan Ampang.

 

The project encompasses a 55-storey block with the first few floors housing the six-star 150-room W Hotel, and the rest to be occupied by the residences.

There will be 353 units of the residences, with estimated gross development value (GDV) of RM900 million.

The project is slated for completion in 2016.

Koong is upbeat on sales, saying that Dijaya had received several en bloc offers for the residences.

"We are tagging on the W Hotel address, which is known worldwide," he said yesterday at the signing of Dijaya's RM500 million commercial paper/medium term notes (CP/MTN) programme.

The serviced residences are part of eight projects worth RM2 billion that Dijaya is launching between the end of this year and December 2013 in Kuala Lumpur, Kajang, Subang, Kota Damansara, Johor Baru and Kota Kinabalu.

The signing of the CP/MTN follows the completion of the company's amalgamation exercise in August involving the injection of RM1 billion worth of properties held privately by Dijaya chief executive officer Tan Sri Danny Tan Chee Sing.

The exercise helped Dijaya increase its landbank to 365ha in the Klang Valley, Johor, Penang and Sabah and which is to be developed over 10 to 15 years with a GDV of RM38 billion.

Dijaya deputy managing director Dickson Tan said part of the RM500 million (CP/MTN programme) will be used to develop projects and fund its expansion.

Dickson Tan said Dijaya is looking to acquire smaller developers and companies with sizeable landbank to become one of the country's biggest developers.

"Merger and acquisition is the next target for us to grow the company's business. There are several parties currently soliciting and talking," he said.

RHB Investment Bank Bhd and AmInvestment Bank Bhd are the joint lead arrangers/joint lead managers for the debt programme.

RM1.5b MRT job awards soon

  By Sharen Kaur

  sharen@nstp.com.my

  Published in NST on October 1, 2012

EVALUATION ONGOING: DRB-HICOM frontrunner for railway track works, sources say
MASS Rapid Transit Corp Sdn Bhd (MRT Corp) will award soon several jobs worth over RM1.5 billion, inclu-ding a contract for track works, for the Sungai Buloh-Kajang MY Rapid Transit (SBK MRT) project, people familiar with the matter say.

For the track works, which is estimated to be worth some RM850 million, it is understood that the frontrunner is DRB-HICOM Bhd-Mitsubishi.

There are three shortlisted bidders for the job, which include Balfour Beatty Rail Sdn Bhd and Leighton-Lion Pacific.

A source close to MRT Corp said the evaluation is still ongoing after the award of the contract (for track works) was deferred last month (September).

On September 13, MRT Corp announced the award of five work packages worth RM3.47 billion for the SBK MRT project.

This follows the conclusion of the One-Stop Procurement Committee (OSPC) meeting chaired by Prime Minister Datuk Seri Mohd Najib Razak.

The contracts are for the sup-ply of train sets, signalling, power supply and depot equipment.

MRT Corp was also expected to award the contract for track works then.

Business Times reported that MRT Corp had requested the bidders (for track works) to re-submit their commercial clarification, including the final price, to lay tracks between Sungai Buloh and Kajang, totalling 41.5km.

Although the stretch from Sungai Buloh to Kajang involves 51km, the job excludes the 9.5km underground tunnel work awarded to the MMC Gamuda JV at RM8.2 billion.

The bidders had resubmitted their bids in mid-September following the request from MRT Corp.

"MRT Corp will be transparent. It will not favour any one party. The group with the best proposal and technical know-how, including strong financing, will be awarded," the source.

Meanwhile, for the five work packages announced last month, it is learnt that Canada's Bombardier Inc last Friday received a Letter of Award for the signalling contract worth RM281 million.

The other winners are Siemens AG, which won two jobs worth RM1.6 billion, Japan's Meidensha Corp, which won a RM459 million job for power supply, and UEM Construction Sdn Bhd, which won a job valued at RM951 million to build viaduct guideway from Taman Mesra to Kajang station.

It is unclear if the three groups also received their respective Letter of Awards last Friday.