Kencana eyes 15-20pc growth post merger

Kencana Petroleum Bhd is optimistic about unlocking revenue synergies
upon merging with SapuraCrest Petroleum Bhd, and is aiming at 15-20 per
cent annual revenue growth rate post-merger.

Group chief
executive officer Datuk Mokhzani Mahathir said after the merger, the
company, to be known as Sapura Kencana Petroleum Bhd, would focus on
unlocking synergies as a merged entity to ensure that it has the right
capabilities to secure larger and more complex projects.

"Our
combined capabilities make us a full-fledged, integrated EPCIC
(engineering, procurement, construction, installation and commissioning)
player with a robust value chain and expanded asset base," he told
reporters after Kencana's annual general meeting (AGM) and extraordinary
general meeting (EGM) in Kuala Lumpur today.

He said the new
entity would have strong synergies derived from premium, end-to-end
turnkey projects that effectively utilise both companies' expertise,
best practices and capabilities.





At the EGM, Kencana's shareholders gave their nod to the proposed merger
between the company and SapuraCrest, with over 90 per cent in favour of
the proposal.

Mokhzani said after the merger, Sapura Kencana
would consolidate its business in Australia and Latin America where they
have already established their presence before exploring new markets
such as North America and Central Asia.

"For Central Asia, we
believe the market there is going to boom in the next couple of years.
So we'll have to see what we can do to provide our services there," he
said.

With a total asset of approximately RM11.85 billion, Sapura
Kencana will become one of the world's top five oil and gas service
support players by asset base once the merger is completed, scheduled by
February next year.

Shares of Kencana Petroleum Bhd gained 1.1
per cent to RM2.82, its highest close since Aug 5. Citigroup Inc raised
its price target and OSK Holdings Bhd its so-called fair value for the
stock after Kencana’s first-quarter net income grew 60 per cent to
RM83.5 million (US$26.2 million), according to the brokerages’
respective reports today. -- Bernama, Bloomberg