MISC shares hit 7-year high on possible unit sale

PETALING JAYA: Shares in MISC Bhd hit a seven-year high on speculation the energy shipping unit of Petroliam Nasional Bhd (Petronas) may be selling its oil tanker unit.

The stock hit RM9.21 in early trade, before closing at RM9.20 yesterday, up 21 sen from the previous close.

This follows a news report speculating that MISC is selling AET Tanker Holdings Sdn Bhd, which owns a fleet of 74 crude oil and product tankers, to US-listed Teekay Tankers Ltd.

AET assets are estimated to be worth RM3.3bil.

“It is difficult to quantify the disposal gain at this point of time without the actual acquisition price,” Kenanga Research said in a report yesterday.

The research house is maintaining its earnings forecast pending further clarification from MISC.

As an illustration of the earnings impact, Kenanga said the division made losses before tax of US$23.7mil (RM86.12mil) in financial year 2014 and US$152.4mil (RM553.8mil) in FY13. It noted that charter rates in the petroleum segment sustained their rally going into 2015 with spot rates surging more than 30% versus the fourth quarter of 2014, as low crude oil prices spurred demand for cargo-carrying tankers.

“We believe the division could return to the black on a full-year basis (FY15), considering that our in-house crude oil assumption of US$57 per barrel suggests that the higher charter rates can be sustained.

“Thus, we think that it would require an attractive pricing for the deal to go through considering the recovery in the segment,” Kenanga said.

Shares in MISC has risen 27% year-to-date, driven by increasing demand for energy storage amid a decline in the price of crude oil.

According to the MISC website, AET is a specialist and leading provider of safe, high-quality maritime logistics solutions to the international petroleum sector. Its fleet, which consists of Aframax, Suezmax, VLCC and mid-range (MR) tankers, serves national and international oil companies, refiners and traders.

MISC acquired AET in 2003 for US$445mil (RM1.69bil).

According to a trade publication, AET is seen as a potential acquisition target for Canada-based Teekay Tankers, which had kept the market guessing since disclosing in December it was negotiating with an unidentified party.

AET was one of the names thrown in along with the likes of Overseas Shipholding Group and Tanker Investments Ltd (TIL), the Oslo-listed sister company of Teekay Tankers.

The report noted that if the acquisition of AET succeeded, it would more than double the number of vessels in the Teekay fleet.

Teekay Tankers has 32 vessels, primarily Aframaxes and Suezmaxes, of 3.8 million dead weight tonnes (dwt) overall.

The shipping publication reported that Teekay Tankers chief executive Kevin Mackay has had discussions with AET about an acquisition but it is not clear how receptive MISC is.