MMC move to boost profit


  • Business
  • Saturday, 05 Apr 2003

BY LEE KAR YEAN

MALAYSIA Mining Corp Bhd (MMC) group chief executive Datuk Ismail Shahudin is confident that the company's proposal to take MMC Engineering Group Bhd (MMCEG) private will result in higher earnings for the MMC group and enhance shareholder value in the long term. 

“The proposed acquisition of MMCEG will create a flexible structure to carry out rationalisation programmes to optimise the synergistic benefits within the group. It will enable us to fully tap the economies of scale arising from this strategic move,” Ismail said after MMC's EGM in Kuala Lumpur yesterday. 

At the EGM, shareholders approved MMC's voluntary offer to acquire all the issued and paid-up shares of RM1 each in MMCEG not already owned by the company. MMC will pay RM4.30 for every share, or issue two new shares of 50 sen each in MMC, credited as fully paid-up, for every one MMCEG share held. 

The shareholders supported the proposal as MMC was in the process of transforming itself into a premier infrastructure, utilities and engineering group, Ismail said. 

He said the voluntary offer provided MMCEG shareholders the option either to redeem their shares at a price above market value or to acquire MMC shares that are more liquid than MMCEG shares. 

Datuk Ismail Shahudin

The offer documents for the acquisition exercise would be dispatched to MMCEG shareholders within five market days.  

MMCEG shareholders have 21 days from the date of the offer document to accept the offer. Upon the expiry of the 21-day period, the offer would be deemed to have been completed.  

MMCEG had earlier proposed a rights issue to increase its share capital to comply with the KLSE listing requirements. MMC being a 75% shareholder of MMCEG would have to pay RM49.8mil to take up its entitlement.  

In contrast, acquiring the remaining shares of MMCEG would only cost MMC a maximum of RM34mil. 

MMCEG is principally involved in engineering services, project management and infrastructure support services. 

Apart from MMCEG, MMC 's key businesses include Pelabuhan Tanjung Pelepas Sdn Bhd, Gas Malaysia Sdn Bhd and Malakoff Bhd.  

Meanwhile, MMCEG unit MMC Oil & Gas Engineering Sdn Bhd has submitted a bid to develop offshore structures at the Ruby Field off Vung Tau in Vietnam. 

According to MMC Oil & Gas Engineering chief operating officer Shaharel Shafiei, the company submitted its bid with Shapadu Corp Sdn Bhd. 

He said although the contract value was small, if successful, it would be a very important step towards gaining a foothold in the Vietnam oil and gas industry. 

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