MISC sails through buyout bid

By SHARIDAN M. ALI

CEO is hopeful that the company will remain profitable this year
PETALING JAYA: It will be business as usual for MISC Bhd although major shareholder Petroliam Nasional Bhd (Petronas) has failed to take the oil and gas shipping company private after several attempts.
“It's business as usual and we will continue with our plans,” said president and chief executive officer Datuk Nasarudin Md Idris.
To
recap, Petronas first made a bid to buy all the shares of MISC on Jan
30 and had extended the deadline when it did not managed to exceed the
acceptance threshold.
Following that on April 5, Petronas revised
the offer price to RM5.50, 20 sen higher than its previous offer. This
was due to resistance from the Employees Provident Fund (EPF), which had held out for a higher price.
EPF, which is the largest minority with 9.5% stake, finally accepted the offer at the revised offer price on April 11.
But, Permodalan Nasional Bhd,
which owns 6.35% of MISC and other minority shareholders did not accept
the offer, leaving Petronas 3.93% short of the 90% acceptance threshold
to make the RM9.16bil privatisation successful. Petronas would have to
wait 12 more months before it could launch any new takeover bid for
MISC.
Observers noted that the period since the onset of the
global financial crisis in 2009 and the resulting downturn of the
economy had been a challenging but exciting period for the company.
But
they said there could be a glimmer of light at the end of the tunnel as
the company had managed to remain profitable since the middle of last
year after two consecutive quarters of losses.
“Our offshore business is still holding steady and liquefied natural gas shipping is stable.
“We have also managed to reduce losses in the chemical tanker business through various cost-cutting measures,” said Nasarudin.
He further explained that the current bunker price was not as firm as it was last year.
“For
the last two months bunker has been hovering at US$600 per tonne levels
compared to the previous levels at US$650 per tonne.
“Bunker
constitutes 27% of our operating cost,” he said. Nasarudin was hopeful
that the company would remain profitable this year.
“Going
forward, we will continue to manage our cost and we may have to trim
some of our businesses,” he said. He revealed the chemical shipping and
petroleum tanker business were still in the red albeit slowly improving.
“Chemical
shipping has improved a bit as rates have firmed up and some of the
excess capacity had been absorbed. But still, it is not near to what it
used to be prior to the downturn. “For petroleum shipping, the excess
capacity is still very large so I don't foresee much difference this
year and next year against the environment in 2012.
“Currently,
very large crude carriers, aframaxes and suezmaxes are 20% in excess
capacity and that's the main problem of the market now,” he said, adding
that the market for petroleum tankers might be better in 2015 when the
excess capacity reduces.
There might be cause for some excitement
as come December, the commissioned Gumusut-Kakap semi-submersible
floating production system (FPS), the region's first deepwater semi FPS
with 1,200 m water depth, hould be up and running.
MISC and Petronas Carigali jointly own the system via a special vehicle, GKL Ltd. “We have towed it to Desaru where we will do the inclination test before handing it over to Shell.
“Once it is commissioned, it will be a new income for MISC via GKL,” he said.
The
Gumusut-Kakap field is Malaysia's second deepwater development after
Kikeh and is expected to produce about 150,000 barrels of oil per day.
It is operated by Sabah Shell Petroleum Co, partnering with Murphy Sabah Oil Co, Conoco Philips Sabah and Petronas Carigali Sdn Bhd.