Sources say potential suitors have been eyeing oil and gas support service provider TGOFFs as a prospective merger and acquisition target.
A couple of suitors have done prospective M&A scenarios involving TGOFFs but things are still preliminary.
Its net assets per share stood at rm1.27 as at Dec 31, 2011.
With TGOFFs ceasing operations at subsidiary Citech Energy Recovery Systems UK Ltd at a cost of 6.2 million pound, its net assets is expected to be lower.
On news that TFOFFs has become a potential M&A target picked up after Ekuinas emerged as a substantial shareholder in mid 2010. It has increased its stake in TGOFFs to 23.9% stake as at Feb 2012. Its largest shareholder is Khalid Omar who has a 33.6% stake.
But Ekuinas says no party has formally approached it to express interest in TGOFFs. However, Ekuinas did say that its investment horizon is between three and five years during which it aims to create value for the investee company and all stakeholders. Like all other private equity firms, Ekuinas will eventually exit from its investments.
Market observers said that with cleaner operations after shutdown of unprofitable units Citech and probably Tanjung CSI Sdn Bhd. Tanjung Offshore would be a better platform for Ekuinas to consolidate the O&G service providers in Malaysia .
But cutting off these unprofitable units it will stop the company from bleeding further. And with the clean up, it will make Tanjung Offshore a better prospect for any takeover and merger exervise.
Without both loss making businesses, TGOFFs’ business model would be like that of a vessel operator.
But for it now (Feb 2012), it will be a bumpy ride over the near term for Tanjung Offshore.
The bulk of the 6.02 million pound will be cash costs, which will deplete Tanjung Offshore’s cash level and raise net gearing to 1.47 times. As at Sept 30, 2011 the company’s cash holdings stood at rm47 million.
While positive about the shutdown of Citech Tanjung Offshore’s tightening cash flow is an immediate concern, restricting its ability to bid for jobs in the near term. Market observers are not ruling out a cash call to address this issue.
A couple of suitors have done prospective M&A scenarios involving TGOFFs but things are still preliminary.
Its net assets per share stood at rm1.27 as at Dec 31, 2011.
With TGOFFs ceasing operations at subsidiary Citech Energy Recovery Systems UK Ltd at a cost of 6.2 million pound, its net assets is expected to be lower.
On news that TFOFFs has become a potential M&A target picked up after Ekuinas emerged as a substantial shareholder in mid 2010. It has increased its stake in TGOFFs to 23.9% stake as at Feb 2012. Its largest shareholder is Khalid Omar who has a 33.6% stake.
But Ekuinas says no party has formally approached it to express interest in TGOFFs. However, Ekuinas did say that its investment horizon is between three and five years during which it aims to create value for the investee company and all stakeholders. Like all other private equity firms, Ekuinas will eventually exit from its investments.
Market observers said that with cleaner operations after shutdown of unprofitable units Citech and probably Tanjung CSI Sdn Bhd. Tanjung Offshore would be a better platform for Ekuinas to consolidate the O&G service providers in Malaysia .
But cutting off these unprofitable units it will stop the company from bleeding further. And with the clean up, it will make Tanjung Offshore a better prospect for any takeover and merger exervise.
Without both loss making businesses, TGOFFs’ business model would be like that of a vessel operator.
But for it now (Feb 2012), it will be a bumpy ride over the near term for Tanjung Offshore.
The bulk of the 6.02 million pound will be cash costs, which will deplete Tanjung Offshore’s cash level and raise net gearing to 1.47 times. As at Sept 30, 2011 the company’s cash holdings stood at rm47 million.
While positive about the shutdown of Citech Tanjung Offshore’s tightening cash flow is an immediate concern, restricting its ability to bid for jobs in the near term. Market observers are not ruling out a cash call to address this issue.
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