Sharen Kaur
The founder and largest shareholder of Eversendai Corp Bhd Tan Sri AK Nathan plan to inject his privately owned liftboat company, Vahana Offshore Sdn Bhd, into the oil and gas (O&G) and construction group for better performance.
In a filing with Bursa Malaysia yesterday, Eversendai said it had received a letter of offer from Vahana Holdings Sdn Bhd (VHSB) for the group to acquire Vahana Offshore.
Nathan has 71.11 per cent stake in Eversendai via VHSB, his private investment vehicle.
Vahana Offshore owns and operates a self-propelled jack-up barge or liftboat named Vahana Aryan, which has been carrying out projects for Saudi Aramco over the last one-and-a-half years. It is the first and only Malaysian company to own and operate a self-propelled jack-up barge, which is used for maintenance, work-over, well-service activities, hook-up, and commissioning and decommissioning of offshore platforms in the oil and gas industry.
Nathan, who is also Eversendai's executive chairman and group managing director, said the asset injection is in the best interest of Eversendai to improve the group's bottom line and its share price.
“Overall, I think this is the best thing to do in the interest of the group. This is a value add for Eversendai in terms of helping its shares price and also improving its bottom line. Further, the proposed offer will enable Eversendai to build a recurrent income business segment and eliminate related party exposure,“ he said at a media briefing here yesterday.
Nathan said the value of Vahana Offshore will be evaluated by an independent valuer and that the transaction will be done at arm’s length. The purchase price will be settled via issuing new redeemable convertible preference shares (RCPS) of Eversendai based on terms and conditions to be mutually agreed between the parties.
Vahana Offshore is building its second liftboat called Vahana Arjun which is targeted to be completed by early next year. The liftboat is being constructed by Eversendai at the group's fabrication yard in RAK Maritime City in the United Arab Emirates and is currently 40 per cent completed.
Eversendai won an RM580 million contract from Vahana Offshore in 2014 to design, build and deliver Aryan and Arjun. Both the liftboats are named after Nathan's two older grandsons.
Nathan expects Arjun to start operation by June 2021.
He said Aryan and Arjun have secured a five-year charter contract with Zamil Offshore to work in Saudi Aramco projects, starting in June 2020 and June 2021 respectively.
“Once the second vessel is completed, we expect its revenue to be registered in Eversendai from the second half of 2021," said Nathan.
Nathan expects the liftboat business to account for 20 per cent of Eversendai’s net profit for the financial year ending December 31, 2020.
Eversendai's current order book is RM1.87 billion. It has a tender book of more than RM10 billion.
In the nine months ended September 30, 2019, Eversendai's net profit fell to RM20.98 million from RM50.50 million in the corresponding period a year ago. Revenue dropped slightly to RM1.19 billion from RM1.21 billion.
The group registered lower net profit primarily due to the loss before tax incurred by its mechanical fabrication, installation and modularisation segment in the Middle East. There was underutilisation of its Ras Al Khaimah fabrication yard facility, owing to the delay in the timing of project awards.
Eversendai is renowned for its extensive experience in the fabrication of highly complex steel works for infrastructures, commercial and industrial buildings as well as the power and oil and gas sectors.
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The founder and largest shareholder of Eversendai Corp Bhd Tan Sri AK Nathan plan to inject his privately owned liftboat company, Vahana Offshore Sdn Bhd, into the oil and gas (O&G) and construction group for better performance.
In a filing with Bursa Malaysia yesterday, Eversendai said it had received a letter of offer from Vahana Holdings Sdn Bhd (VHSB) for the group to acquire Vahana Offshore.
Nathan has 71.11 per cent stake in Eversendai via VHSB, his private investment vehicle.
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| The group's fabrication yard in the United Arab Emirates (Courtesy Photo) |
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| Tan Sri AK Nathan |
“Overall, I think this is the best thing to do in the interest of the group. This is a value add for Eversendai in terms of helping its shares price and also improving its bottom line. Further, the proposed offer will enable Eversendai to build a recurrent income business segment and eliminate related party exposure,“ he said at a media briefing here yesterday.
Nathan said the value of Vahana Offshore will be evaluated by an independent valuer and that the transaction will be done at arm’s length. The purchase price will be settled via issuing new redeemable convertible preference shares (RCPS) of Eversendai based on terms and conditions to be mutually agreed between the parties.
Vahana Offshore is building its second liftboat called Vahana Arjun which is targeted to be completed by early next year. The liftboat is being constructed by Eversendai at the group's fabrication yard in RAK Maritime City in the United Arab Emirates and is currently 40 per cent completed.
Eversendai won an RM580 million contract from Vahana Offshore in 2014 to design, build and deliver Aryan and Arjun. Both the liftboats are named after Nathan's two older grandsons.
Nathan expects Arjun to start operation by June 2021.
He said Aryan and Arjun have secured a five-year charter contract with Zamil Offshore to work in Saudi Aramco projects, starting in June 2020 and June 2021 respectively.
“Once the second vessel is completed, we expect its revenue to be registered in Eversendai from the second half of 2021," said Nathan.
Nathan expects the liftboat business to account for 20 per cent of Eversendai’s net profit for the financial year ending December 31, 2020.
Eversendai's current order book is RM1.87 billion. It has a tender book of more than RM10 billion.
In the nine months ended September 30, 2019, Eversendai's net profit fell to RM20.98 million from RM50.50 million in the corresponding period a year ago. Revenue dropped slightly to RM1.19 billion from RM1.21 billion.
The group registered lower net profit primarily due to the loss before tax incurred by its mechanical fabrication, installation and modularisation segment in the Middle East. There was underutilisation of its Ras Al Khaimah fabrication yard facility, owing to the delay in the timing of project awards.
Eversendai is renowned for its extensive experience in the fabrication of highly complex steel works for infrastructures, commercial and industrial buildings as well as the power and oil and gas sectors.
WATCH THE VIDEO
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