MRCB:

• Sources say the EPF is set to complete its acquisition of the RRI land in Selangor from the federal government by end June 2012 for over rm2 billion. The land about 2200 acres of which are available for development, is to be bought as agricultural land for over rm2 billion. Under the proposed plan, the federal government will be entitled to a further share of the profit should certain tracts of land be tendered out are sold for higher than expected prices. Only 890ha are available for development after taking into account land retained. The land transfer deal will make the EPF the landowner and master developer of the 1215 ha of land earmarked for phased development over 15 to 20 years.
• The EPF will soon calling for tenders for land parcels slated for outright sale and make requests for proposals for parcels set aside for joint development that could give the EPF a higher income yield.

KPS/Naim Indah Corp:

• It has emerged as the local partner of Oman-based NGC for the LPG distribution business that NGC had just acquired from Shell Malaysia Trading Sdn Bhd forrm40 million cash. It was reported in March 2012 that Naim Indah Corp Bhd had been invited to participate in the said LPG business together with NGC.

Axiata:

• It was looking to acquire telecommunication towers from India’s Idea Cellular to forma transnational tower company. Sources say Axiata which owns 19.1% stake in Idea is looking to merge or acquire more than 8000 of the latter’s towers to create a unified tower entity. However, no decision had been taken yet by the Aditya Birla group, Idea’s majority shareholder.
• Industry observers said consolidating tower infra has its merits. They are unlocking the value of its assets, synergies from joint monetizing opportunities and allowing the telcos a firmer had when controlling costs. However, the difficulty will be in the execution due to regulatory settings across multiple laws including the buy-in from Idea which already has a 16% stake in Indus Towers. Another concern is that if Axiata embarks on this plan to acquire Idea’s towers in India, it will strain its balance sheet. The telco should not be in large scale in the business of owning infra. The company should concentrate on providing mobile and data services rather than trying to monetize towers. In the past, the tower business in India attracted a steady stream of foreign investors, given its robust potential and compelling valuations. But now (June 2012), the sector’s prospects have been dampened by operator’s high running costs and ballooning debts.

Silver Bird:

• It has defaulted on payments (rm7 million) for the lease of a warehouse complex in Shah Alam from Jan 2012 to May 2012. On May 28 2012 MBSB served a writ summons and statement of claim on Silver Biird to recover the rm19.64 million loaned to Silver Bird’s subsidiary. In March 2012, it could not ascertain the extent of the accounting irregularities but estimated the max exposure to be rm111.5 million. Its major subsidiaries have also defaulted on repayments of banking facilities to the tune of rm5.36 million.

Source: Kenanga Research - 12 June 2012