[An article from TheStar on 9-Nov-2011]

Kencana Petroleum Bhd will jointly bid withSapuraCrest Petroleum Bhd for international engineering, procurement, construction and commissioning contracts upon completion of their merger slated for the first quarter of 2012, said Kencana group chief executive officer Datuk Mokhzani Mahathir.
CK>> Q1 of 2012 is pretty near now. Perhaps the announcement of EGM's date will be released on Dec 2011?

'With SapuraCrest winning the contract from Petrobras, this is good for the merger. These are some the things we are hoping to do as a bigger company. To jointly bid for contracts is the whole purpose of our merger,' Mokhzani said.
CK>> Yes, SIZE does matter, as usual, if you are aiming to secure bigger projects.

SapuraCrest announced on Nov 1 that it had been awarded a US$1.4bil (RM4.4bil) contract to charter and operate three units of Pipe Laying Support Vessels (PLSV) from Petroleo Brasileiro SA (Petrobras). It will be SapuraCrest's maiden entry into this region.
CK>> Maiden entry? Normally if profitless, just to build reputation and set footprint.

Asked whether Kencana was preparing or investing more for capital expenditure for future international jobs, Mokhzani declined to comment.

A Nomura Research analyst said SapuraCrest was making its mark in the oil and gas arena. While the analyst remained 'neutral' for now on SapuraCrest, he said this development was setting up nicely for a re-rating story. 'We are positive on this development. While we are still cautious in the near term, this provides further comfort to investors to buy into the SapuraCrest Petroleum-Kencana Petroleum merger story,' the analyst said, adding that the original Petrobras tender had involved six vessels for a total value of about US$2bil (RM6bil).
CK>> Yes, it is a good buy... Hehe...

'The award of the lion's share of the contract, and without a tie-up with any other major installation player, signifies how far the company has come in terms of international competitiveness since the Sapura group first became involved in 2003,' the analyst said.

He sees substantial earnings impact after the capital expenditure jump a 50% increase in normalised profit in its financial year ending Jan 31, 2012.Another analyst was less optimistic on SapuraCrest's ability to garner good profits from this contract. This is because, based on a report by Upstream, SapuraCrest's bid for the Petrobras contract was 9% below its closest foreign competitor.
CK>> Wah! Give up all the margin ya...

'Nine per cent is very substantial. So I am concerned about the margin contribution of this project. Many Malaysian companies that go overseas always go through a learning curve. To get a foothold in this project, SapuraCrest may be foregoing its margins on this project,' the analyst said.

Upstream reported that SapuraCrest had received bids from a list of Brazilian facilities that included OSX, Eisa, STX, Brasfels and Wilson & Sons for the construction of one unit.

The report said only SapuraCrest had made a competitive offer for a single Brazilian-built vessel, with a daily charter rate of at least US$265,000. SapuraCrest also bid to supply the two larger foreign-built vessels at US$245,000 per day 9% below the closest foreign bidder.

SapuraCrest is in the midst of merging with Kencana to form what would be the country's largest support services provider, valued at about RM12bil.

Under the proposal, Kencana shareholders will get RM3 a share worth of Integral Key Sdn Bhd stock sand cash, while owners of SapuraCrest stocks will receive the equivalent of RM4.60 per share in shares and cash. Integral Key is the special purpose vehicle established by Mayban Ventures. Sdn Bhd.