BOUSTEAD HOLDINGS BHD, through subsidiary Boustead Mint Sdn Bhd, has reached an agreement to buy a 70% stake in BP Malaysia Sdn Bhd for RM456mil cash, subject to working capital requirements. The remaining 30% is held by Lembaga Tabung Angkatan Tentera (LTAT).
In a statement to Bursa Malaysia yesterday, Boustead Holdings said the acquisition of the BP Malaysia stake would enable it to gain a strategic partner from which it could tap expertise in the petroleum products retail business.
It said that after completion of the acquisition, it would sell 43% of Boustead Mint to Tegas Pertini Sdn Bhd, which is currently owned by Dr Shafiq Sit Abdullah, Datuk Zainol Abidin A. Hamid and Maya Petroleum Sdn Bhd.
The BP Malaysia stake purchase will enable Boustead Holdings to acquire the former's 245 petrol stations nationwide, plus a modern petroleum terminal, a liquefied petroleum gas (LPG) distribution network and a joint venture in two automated LPG plants.
BP Malaysia, which has an estimated 8% share of the downstream petroleum products market in the country, has net tangible assets of about RM405mil. It posted a profit after tax of RM40.4mil for the year ended Dec 31, 2003.
“It is a good asset in terms of value and BP Malaysia has a strong presence in Malaysia,'' said the head of research of a local broking company.
Boustead Holdings said the acquisition was an opportunity for the group to be involved in a strategic, essential commodity industry in Malaysia where there were only a few players.
“The business of BP Malaysia generates consistent returns and cash flows given the regulated and oligopolistic nature of the business. The proposed acquisition thus represents an opportunity for the Boustead group to expand its trading activities via the additional contribution from the complementary retailing activities of BP Malaysia,'' the company said.
In a separate statement, Boustead group managing director Tan Sri Lodin Wok Kamaruddin said the entry of Tegas Pertini would bring the expertise needed to ensure that the group was able to tap the full potential of the downstream petroleum and retail sector efficiently and immediately.
Tegas Pertini's Dr Shafiq was formerly the head of corporate planning at Sime Darby Bhd and was responsible for the initial setting up of PROJET with Conoco Asia Pacific. He currently also sits on the boards of several private oil and gas-related companies.
Zainol is president of the Malay Chamber of Commerce Kedah and also sits on the boards of several public listed and private companies, while Maya Petroleum is a private limited company engaged overseas in downstream petroleum activities which are similar to those undertaken by BP Malaysia.
“Our intention to partner Tegas Pertini is also based on fundamentals given the oil and gas expertise of its shareholders and team to handle key areas including supply management of petroleum products, their skills-set in developing new markets for petrol products and their experience in retail network development,'' said Lodin.
He said the synergies between BP Malaysia and the Boustead group included the use of Boustead's large land bank for the strategic growth of BP Malaysia.
“We retain our commitment to maintain the current management team and will build on the strengths of BP Malaysia personnel,'' he added.
Boustead, along with LTAT, will have an effective 70% stake in BP Malaysia following the completion of the sale of a stake in Boustead Mint to Tegas Pertini.
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