KUALA LUMPUR: Ekuiti Nasional Bhd (Ekuinas) is exploring options for its stake in Malaysian oil tanker operator Orkim Sdn Bhd, including a potential sale, according to sources.
Ekuinas, is working with advisers to divest Orkim in a deal that could value the business at as much as RM1bil, the sources said. An initial public offering in Kuala Lumpur is also an option for Orkim, said the sources.
Ekuinas owns 95.5% of Orkim and has invested RM346.3mil into the company since its acquisition in 2014, according to its website. Discussions are still at an early stage and may not necessarily result in a deal, said the sources.
A representative at Ekuinas said in a response to Bloomberg that the firm doesn’t comment on speculation of its investment or divestment activities and will issue official announcements of any new developments.
A representative for Orkim said that the company doesn’t comment on speculations regarding its shareholders’ activities.
Ekuinas had in 2017 agreed to sell Orkim to UMW Oil and Gas Corp for RM473mil, but the plan was abandoned as declines in oil prices made the deal unattractive. Oil prices dropped to a low of US$26 a barrel in early 2016 and have since recovered, trading above US$50 a barrel.
Ekuinas is seeking a higher valuation for Orkim as the company has shown improvement in earnings as crude oil price recovers, one of the people said.
Orkim, which started as a ship broker in 2004, became a ship owner later after it took delivery of its first vessel in 2009 and started serving Royal Dutch Shell Plc in Malaysia and Petroliam Nasional Bhd, its website shows.
It has 17 vessels with a total tonnage of 107,000 deadweight tonnes as of 2016, according to its website. — Bloomberg
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