BUS operator Park May Bhd, in an effort to reduce its debts, plans to dispose of its 20% stake in Rangkaian Segar Sdn Bhd, the operator of the Touch n Go electronic payment system.
We have been disposing certain properties in the past and are now in discussions with an information technology-based company listed on the KLSE to dispose of our stake in Rangkaian Segar, Park May chairman Tun Mohammed Hanif Omar told reporters after the company EGM in Kuala Lumpur yesterday.
He said that although Rangkaian Segar, which has a paid-up capital of RM16mil, was profitable, it contributed less than RM1mil to Park Mays bottom line.
We began the negotiations with the IT-based company in November and intend to dispose of our stake in Rangkaian Segar before the end of this year, he added.
Hanif said although Park May had been incurring losses over the last few years, the losses had been on the downtrend. Park May incurred a pre-tax loss of RM13.3mil for the financial year ended June 30, 2002, from a pre-tax loss of RM17.3mil in the previous financial year.
He said while much of the losses were due to the companys stage bus operations, Park Mays express bus business was doing well, noting that the companys recently launched services to Haadyai had been getting good response from the public.
He said Park May would look at various ways to protect its shareholders interest and this would include disposing certain non-core assets, improving its efficiency and by venturing into new businesses.
He said the company was already looking at a number of potential new businesses. However, we will stick to our core business, which is transportation, he said.
Hanif said one of the new areas that the company might be venturing into was coach building, noting that Park May was the first to introduce semi-double deck buses in the country. The government has ordered two units of the semi-double deck bus from us for their own use. So, this may be a new area we will look into, he added.
On its plan for the ailing stage bus operations, Hanif said: We cannot run away from the social obligation to carry on servicing the non-profitable routes. However, we have taken this matter to the government to see how we can overcome it.
He attributed the drop in ridership for certain routes of the stage bus operations to the recent departure of foreign workers, the improved road conditions in the Klang Valley which resulted in more people preferring to travel in their own cars, as well as the introduction of the economically viable small sized cars into the market.
Hanif said the competitive airfares offered by AirAsia had also, in some ways, affected Park Mays express bus business.
On Renong Bhds plan to dispose of its stake in Park May, Hanif said: It (Renong) is still looking for a buyer.
Renong recently aborted its deal with Kumpulan Kenderaan Malaysia Bhd to sell a 38% stake in Park May because the parties could not agree on certain terms and conditions.