Benalec  Holdings  announced  that  the  parties   to  the  binding  term  sheet (including an indirect 70%-owned subsidiary Spektrum Kukuh) to undertake the reclamation works and sale of approximately 1,000 acres of land off the coast  of  Tanjung  Piai,  Johor  Darul  Ta’zim  for  the  purpose  of  constructing and  operating  a  crude  oil  and  petroleum  storage  facility  together  with  a private jetty (“Project”) have mutually agreed to an additional duration of six months  expiring  11  June  2015  to  finalise  the  terms  and  conditions  of  the Sale and Purchase Agreement. (Source: Bursa Malaysia)

Comment:  This  fourth  extension  is  not  unexpected  as  the  Detailed Environment Impact Assessment report is pending public consultation and approval. Pending the necessary approvals for the reclamation project and finalization of the terms and conditions of the SPA with 1MY Strategic Oil Terminal, we understand that preliminary works continue to be in progress. Our high valuation  of RM1.98 and TR BUY rating for Benalec is subject to commencement  of  the  massive  Tajung  Piai  and  Pengerang  land reclamation  projects.   Share  price  has  fallen  to  RM0.60,  which  implies  a reasonable CY15 PE of 8.8x.

Source: Affin Hwang Capital Research - 15 Dec 2014