Tan Sri Mokhzani Mahathir was redesignated as CEO of Opcom Holdings on Friday, moving from a previous non-executive directorship post he had held since 2009, even as speculation on a possible spot on the board of Yinson Holdings Bhd continued to rise.
Opcom, of which Mokhzani’s brother Mukhriz Mahathir is a founder, operates the country’s only fully equipped laboratory that it uses to conduct various cable tests on cable products.
One of its subsidiaries, OPCOM Cables Sdn Bhd, is a joint venture with Ericsson Network Technologies AB, Sweden with shares of 70% and 30% respectively, operating a Shah Alam plant that manufactures fiber optic cables, systems and accessories.
Nevertheless, investors are still interested in Mokhzani’s substantial 18.52% stake in Yinson Holdings Bhd, which analysts say is enough to justify a push for a board position at the oil and gas service provider.
Yinson, who has largely been involved in overseas jobs such as in Vietnam, could see its prospects jump at undertaking work for Petronas or other local players if Mokhzani, revered as a shrewd corporate player, is appointed in a decision-making role at the group.
“There is much speculation that Mokhzani will be able to assist in obtaining contracts from the Malaysian market if he becomes a board member or director at Yinson.
“Currently, most of Yinson’s business is overseas,’ said an analyst at a securities fund.
An analyst at a large investing firm said Mokhzani eventually taking some sort of directorial or managerial role in the company would be a “natural” development.
“There will be no point holding such a large number of shares and only remaining a passive investor,” said the analyst.
While the group’s directors going on record a few weeks ago to say there will be no “change in direction” for the company in spite of the former SapuraKencana Petroleum Bhd vice-chairman’s stake, Mokhzani’s influence has seemingly had a bearing on Yinson’s fortunes.
Mokhzani, Malaysia’s 26th richest man, had become Yinson’s second largest shareholder two years ago after purchasing an additional 14.64% stake in the company through Kencana Capital, an investment vehicle he manages with longtime associate Yeow Kheng Chew.
Proceedings from the stake purchase and other share offers, along with bank borrowings, were used to acquire Norway-listed Fred Olsen Production ASA for RM551.3 million in December last year, pushing Yinson to an enviable position as the sixth largest player in the global oil and gas production, storage and offloading (PSO) segment.
And barely a month before the acquisition, a Yinson subsidiary, Yinson Energy Sdn Bhd was awarded three Petroliam Nasional Bhd licences that would enable it to tender for future local projects in mobile and floating offshore facilities, as well as naval architecture and marine engineering.
The company’s earnings in 2014 had jumped 95.2% to RM70.85 million, from RM36.28 million in 2013 – and only within half a year of Mokhzani’s upping his stake.
Two weeks ago it secured a maximum US$780 million (RM2.87 billion ) loan facility for a FPSO project in Ghana, a step forward in a RM12 billion contract will see Yinson process oil and gas from a Tano Basin offshore block to supply gas for Ghana’s electricity generation needs for 15 years.
With the rise of Yinson, could it one day grow to threaten the fortunes of SapuraKencana which was previously referred to by Mohkzani as his “oil and gas mainstay”?
During his tenure as vice-chairman of SapuraKencana, Mokhzani, who still owns 9.12% of SapuraKencana, had denied any conflict of interest between the two firms, referring to Yinson as “a clean, small company with interests in trading, logistics, ports, and floating, storage and offloading vessels.”
Analysts believe SapuraKencana’s larger scope of operations versus Yinson’s mostly focused services will put off any substantial rubbing of shoulders, at least in the short term.
SapuraKencana’s sheer size as the world’s largest owner and operator of tender rigs netted itself RM1.64 billion in profit last year, dwarfing Yinson’s RM945 million revenue for the year.
“Based on the difference in magnitude and scope of operations, we don’t foresee direct competition between the two entities for now,” said an analyst.