DMIB transfer listing status to be completed by August


  • Business
  • Thursday, 24 Apr 2003

By LIEW LAI JING

THE delisting of DMIB Bhd and the transfer of its listing status to Sime Engineering Services Bhd (SES) will be completed by end August, according to DMIB's independent non-executive director Tan Sri Mohd Ramli Kushairi. 

The privatisation of DMIB was part of the proposed reorganisation scheme involving a change in the company's core business from the manufacturing of tyres and tyre-related products to a new business with growth potential and thereby generating better return to its shareholders, he said. 

Ramli told a press conference this after the company's court-convened meeting and EGM in Subang Jaya yesterday.  

“Wth the reduction of tariffs and other trade barriers under the Asean Free Trade Area (Afta) and the opening up of the tyre market to global players, DMIB needs economies of scale and also research and development (R&D) to be both cost and quality competitive. 

“We will lose market share (in the tyre sector) after Afta and we cannot wait for bad things to happen,” Ramli said. 

The reorganisation scheme involves SES acquiring 13 companies with businesses in the oil and gas, electrical and electronics, information technology, industrial, mechanical, engineering and biotechnology industries. 

SES has a current order book of more than RM400mil from its subsidiaries Sime Engineering Sdn Bhd and Sime SembCorp Engineering Sdn Bhd.  

Sime SembCorp provides fabrication, engineering and construction services to the oil and gas industry.  

Sime Engineering's main activity is the provision of design and consulting engineering services to the oil and gas, and power generation industries. 

Sime SembCorp's order book of more than RM300mil includes contracts from oil majors such Petronas Carigali Sdn Bhd, Shell and Esso in Malaysia, and also in Nigeria. 

For the project in Nigeria, Sime SembCorp was awarded a subcontracting job valued about RM200mil. 

The duration of these contracts vary between 18 and 24 months. 

Sime SembCorp has also completed some projects in Iran and a contract in Qatar.  

Asked if any of the companies had tendered for contracts in Iraq, director Martin Giles Manen said the management had been looking at some projects and had not put any tenders yet. 

On March 23, the Malaysia-China Hydro Joint Venture, led by Sime Engineering, signed an agreement with Sarawak Hidro Sdn Bhd for CW2 Package (main civil works) for the Bakun hydroelectric dam.  

The package is valued at RM1.8bil. 

Sime Engineering, which owns an effective 35.7% stake in the joint-venture company, was expected to make profit margins of between 15% and 20% for its portion of the contract, Manen said. 

However, he did not reveal the quantum of the civil works portion for Sime Engineering. 

Sime Engineering's current order book is more than RM100mil, excluding the Bakun project. 

On the outlook for the financial performance of SES, Manen said the company hoped to maintain, if not improve, the revenue and profit for SES in future. 

At both the court-convened meeting and the EGM, shareholders voted unanimously in favour of the restructuring scheme.  

Under the restructuring scheme, the company has proposed a capital distribution of 26.4 sen per share to DMIB shareholders and a share swap of one SES share for every one DMIB share held. 

Upon the completion of the scheme, Sime Darby Bhd, as major shareholder, will own a 70% stake in SES. 

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