New party eyes PDZ Holdings

PETALING JAYA: PDZ Holdings Bhd, the container shipper that tycoon Tan Sri Robert Tan Hua Choon sold to Pelaburan Mara Bhd (PMB), could see the emergence of another major shareholder looking to use it as a listed oil and gas (O&G) vehicle, the same rationale PMB had used when buying into it.

“A few parties have approached PMB with the view of taking up a block of shares (in PDZ). It could mean that PMB and this other party may jointly own PDZ, with both using this company as their O&G vehicle,” a source said.

However, PDZ’s maiden venture into the seemingly lucrative O&G sector may have hit a snag – its deal to buy a 20% stake in Efogen Sdn Bhd, a privately owned O&G services firm, could fall through, sources said.

“Efogen may not meet the enterprise value (EV) expectations of PDZ, and so this deal may not materialise, although negotiations are still ongoing,” said a source.

In late April, PMB paid RM41mil to buy a 27% controlling stake, mainly from Tan.

Tan had walked away with RM30mil from the share sale, although insiders said he probably pocketed more from the deal as the other vendors were aligned to him.

Barely a month later, PDZ said it was looking to buy 20% of Efogen, which is involved in the chartering of offshore support vessels for the O&G industry.

PDZ was looking to pay RM18mil for that stake, valuing Efogen at RM90mil.

This price works out to more than 17 times Efogen’s 2013 net profit after tax and minority interests of a mere RM5.2mil, which is similar to the price earnings multiple valuation of Alam Maritim Resources Bhd and recently-listed Icon Offshore Bhd.

However, Efogen is a much smaller entity, as its 2013 profits are a fraction of earnings of these two companies.

For financial year 2013, Icon made a profit of close to RM90mil, while Alam Maritim posted RM80mil in net profits.

On May 20, a week following its announcement of the Efogen acquisition, PDZ provided additional explanation on the deal, following a query from Bursa Malaysia.

Among others, PDZ said the purchase price, which works out to a massive 242% premium to Efogen’s net assets, was “fair after taking into account, that as a condition precedent to the deal, a valuation is to be undertaken by Grant Thornton, supporting Efogen’s EV to be at least RM90mil”.

Said a source, “PMB, having studied the numbers and EV of Efogen, has some reservations about the price being asked for by Efogen. It (PMB) does not intend to overpay, so this deal could fall through, although negotiations are still ongoing.”

Meanwhile, one industry source speculated that if the new shareholder were to emerge in PDZ, the company would then look to acquire Johor-based O&G assets that are owned by the state or its investment arm.

On a separate note, since PMB’s entry into PDZ, the latter has seen a number of board changes, with existing members leaving and new individuals joining the board.

Among them is PMB’s group chief executive officer Nazim Rahman, who has also been appointed the managing director of PDZ. He declined to comment.

PDZ shares, which had been hovering around the 15-sen level in the last few months, rose to 17 sen last week on active trade, closing at 16.5 sen last Friday.