Corporate results: Petronas, Gagasan Nadi, Crest Builder, Axis REIT and Press Metal

Petronas signs TCP with MISC, Avenir to charter LNG bunker vessel
Petroliam Nasional Bhd’s (Petronas) has signed a time charter party (TCP) with MISC Bhd and Avenir LNG Ltd to charter a 7,500-cubic metre liquefied natural gas (LNG) bunker vessel. In a statement yesterday, Petronas, through its subsidiary, Petronas LNG Sdn Bhd (PLSB), stated the collaboration positions the company among the first LNG bunkering service providers in the South East Asia region. Petronas noted the LNG bunker vessel is capable of providing bunkering services to LNG fueled vessels across Malaysia, and also transporting smaller scale LNG cargoes across the region. Petronas added the company has set up the necessary infrastructure for LNG bunkering services at Pengerang, Johor and Sungai Udang, Melaka, and is also actively working towards the establishment of LNG bunkering global network through partnerships with port operators and international industry players.

Gagasan Nadi to acquire assets in hostel concession for RM158m
Gagasan Nadi Cergas Bhd is planning to acquire the entire stake in Konsortium PAE Sepakat Sdn Bhd (KPS) for RM158 million cash from P.A.E. Builders Sdn Bhd and Seri Delima Anggun Sdn Bhd. In an exchange filing yesterday, Gagasan Nadi noted it will fund the deal with the issuance of Islamic medium-term notes and a convertible sukuk. The acquisition is expected to be completed in the first quarter of 2020. KPS holds concession agreements with the Malaysian government for seven polytechnic hostels in six states nationwide, entailing design, construction and facilities management. Gagasan Nadi noted the proposed acquisition will allow it to be entitled to the future cash flow streams from the seven concession agreements over the remaining tenure period, while allowing the group to extent its in-house facilities management services to the seven polytechnic hostels.

Crest Builder terminates RM1.3b development plan  
Crest Builder Holdings Bhd’s 51%-owned subsidiary, Landasan Bayu Sdn Bhd (LBSB), has agreed with Lembaga Getah Malaysia (LGM) to terminate their joint venture (JV) development agreement (JDA) for the development of a 4.75 acres land on Jalan Ampang, Kuala Lumpur. In an exchange filing yesterday, Crest Builder said LBSB and LGM had mutually agreed the JV is no longer commercially and financially viable due to the reduction in land size and reduction of plot ratio imposed by the local authorities. The proposed development was a mixed commercial development which would have comprised of retail, premium residential and offices with a projected gross development value of RM1.33 billion. Crest Builder noted LBSB will remove the caveat on the land and LGM will refund all deposits to LBSB. The termination will not have any significant effect on Crest’s earnings or net assets.

Axis REIT to raise fresh funds from placement
Axis Real Estate Investment Trust (Axis REIT) has proposed to place out 247.46 million new units or upto 20% of its units issued to repay existing bank financing and reduce its gearing ratio. In an exchange filing yesterday, the REIT noted the new unit placement will be to a third party investors to be identified later. Assuming at an issue price of RM1.75 per unit, the exercise could raise as much as RM433.05 million from the proposed placement. Axis intends to use RM428.3 million to repay bank borrowings taken to finance the acquisitions of properties and carry out development projects within 12 months. The total bank financing of Axis REIT as at Sept 30, 2019 stood at RM1.19 billion while its gearing stood at 40.17%. Based on the average effective profit rate of 4.36% per annum of Axis-REIT’s existing bank financing as at Sept 30, 2019, the repayment of the bank financing is expected to result in gross financing cost savings of RM18.67 million per annum. The first tranche of the proposed placement is expected to be completed by the end of 2019, it added.

Press Metal’s unit to acquire stake in three companies for RM43.182m
Press Metal Aluminium Bhd’s wholly-owned subsidiary, PMB (Klang) Sdn Bhd, plans to acquire the entire equity interest in PMB Central Sdn Bhd, PMB Northern Sdn Bhd and PMB Eastern Sdn Bhd from Everlast Aluminium (M) Sdn Bhd for RM43.182 million. Everlast Aluminium is wholly-owned by PMB Technology Bhd. In a filing with Bursa Malaysia yesterday, Press Metal said PMB Klang would also acquire the entire equity interest in PMB Aluminium Sabah Sdn Bhd from PMB Technology for a cash consideration of RM1.2 million. Press Metal said upon completion of the acquisitions, the enlarged group would provide a one-stop solution to customers by having both manufacturing and trading arms, as well as, a platform to compete more competitively with other aluminium players in the industry. “Barring any unforeseen circumstances, the proposal is expected to be completed by the fourth quarter of 2019,” it added.