RHB Research Neutral on UMW, fair value unch at RM13.15

KUALA LUMPUR: RHB Research is maintaining its Neutral recommendation on UMW Holdings
with an unchanged fair value of RM13.15 after the latest corporate
development involving the proposed listing of its oil and gas (O&G)
subsidiary.
It said on Friday UMW would transfer the offshore
drilling business and certain companies in the oilfield services
division under UMW and its subsidiaries to UMW-OG. The listing would be
by the fourth quarter of 2013.
UMW-OG is involved in the
upstream sector of the O&G industry, providing offshore drilling
and oilfield services, including engineering and maintenance services.
RHB
Research said the listing company would only include UMW's profitable
core oil and gas (O&G) businesses in offshore drilling and oilfield
services while the unprofitable, non-core loss making O&G
businesses would be retained in UMW.
The initial public offer
(IPO) involves 843.18 million UMW-OG shares or 39% of the enlarged
capital of UMW-OG. UMW will offer for sale 231.38mil UMW-OG shares and
a public issue by UMW-OG of 611.8mil new shares. UMW will end up with a
61% stake in UMW-OG after the IPO.
It said UMW management would hold a briefing for analysts later Friday.