Wednesday, September 12th, 2018

 

Mexico must be ready for bilateral US trade deal, says minister

MEXICO CITY, Sept 12 — Mexico expects US-Canada talks on trade to yield an agreement, but Mexico must be ready to pursue a bilateral trade deal with the United States if Ottawa and Washington do not come to terms, Mexican Economy Minister…


Debenhams shares gain after Sports Direct director’s comments on House of Fraser combination

LONDON, Sept 12 — Shares in Debenhams rose as much as 9 per cent today after an outgoing director of Sports Direct said the sportswear firm’s board had discussed combining the department store group with House of Fraser. Sports Direct,…


Ryanair defiant as strike grounds flights in Germany

BERLIN, Sept 12 — Pilots and cabin crew at Ryanair in Germany staged a full-day walkout today and threatened further strikes as management at Europe’s largest low-cost carrier struggled to rein in an industrial relations revolt. The strike came…


VW ex-CEO, Bosch CEO won’t testify in Stuttgart trial, says judge

STUTTGART, Sept 12 — Former Volkswagen (VW) Chief Executive Martin Winterkorn and Bosch CEO Volkmar Denner are no longer expected to testify in a trial brought against VW’s main shareholder Porsche SE by investors, according to a judge. Most of…


Tech stocks weigh on Wall Street, energy stocks help cut losses

NEW YORK, Sept 12 — The benchmark S&P 500 and the Dow Jones Industrial Average were flat today, as gains in energy companies helped offset a slide in technology stocks, which weighed on the Nasdaq. Shares of Apple, Twitter, Alphabet and…


Ryanair CEO steps up warning on flights being grounded after Brexit

LONDON, Sept 12 — Ryanair’s chief executive stepped up his warning about the risk of flights between Britain and Europe being grounded for days in the wake of Britain’s exit from the European Union next March, saying there had been no…


Unisem gets takeover offer of RM3.30 a share

PETALING JAYA: China-based Tianshui Huatian Technology Co Ltd. (TSHT) and Tianshui Huatian Electronics Group Co Ltd (TH Group) have signed a collaboration agreement with the single largest shareholder of Unisem collectively, chairman John Chia and director Alexander Chia, to start the ball rolling on a plan for the Chinese parties to acquire at most a 75.72% stake in Unisem for RM3.30 a share.

The principal activity of TSHT is provision of semiconductor integrated circuits testing and packaging services, while TH Group is in the production of power devices.

The deal values Unisem at almost RM2.4 billion. John, Alexander and companies affiliated to them collectively own a 24.28% stake in Unisem. The two companies are Jayvest Holdings Sdn Bhd and SCQ Industries Sdn Bhd.

The offer however is conditional upon TSHT obtaining the approval of its shareholders to undertake the offer, and the Chinese authorities' go-ahead to undertake the overseas purchase. A formal offer will only be made once these approvals are obtained.

The collaboration agreement signed between TSHT and the father and son duo yesterday was for the duo to participate in the joint offer and to form a strategic partnership for the expansion and development of Unisem's business operations upon completion of the offer.

The offer is conditional upon the joint offerors holding at least 50% of Unisem in aggregate at the end of it.

The joint offerors intend to maintain the listing status of Unisem.

The collaboration agreement comes with a call option for John and Alexander for Unisem shares held by TSHT in excess of the required threshold, which is enough shares to maintain the 10% gap between TSHT and John and Alexander's holdings.

HT Hong Kong and HT Malaysia are special purpose vehicles incorporated by TH Group, the holding company of TSHT, and TSHT, respectively to undertake the offer.

TSHT said the Unisem Group's business is complementary to its existing business as it will allow TSHT to further strengthen its global presence by leveraging on the Unisem Group's relationships with its vast network of customers in Europe and North America. TSHT, being essentially China-centric in terms of operations and customers, would benefit from a collaboration with the Unisem Group in terms of the latter's geographic spread and different customer profile.

On the other hand, TSHT, having a significant presence in the semiconductor industry in China and being among the largest outsourced semiconductor assembly and test players worldwide, would enable the Unisem Group to expand more rapidly in its operations in Chengdu, China.

“In this respect, TSHT has great confidence in the current management team of Unisem. As such, both parties intend to continue the existing business of the Unisem Group as well as maintain the existing management team of Unisem. This will also provide assurance to the Unisem Group's existing suppliers and customers on the continuity of the Unisem Group's business.”


Cost the main impediment to growth of broadband in Malaysia: World Bank Group

KUALA LUMPUR: Malaysia should adopt four important policy goals to unlock the full potential of its digital economy, which includes addressing its biggest impediment, the cost of broadband.

According to a new World Bank report “Malaysia's Digital Economy: A New Driver of Development” launched today, Malaysia should create a dynamic and more competitive digital ecosystem; achieve universal, fast and inexpensive internet connectivity; improve human capital through better curriculum and lifelong learning opportunities; and safeguard future digital tax revenues.

World Bank Group lead economist Richard Record said Malaysia is a mobile first country but underperforms in terms of broadband speed and price, driven by a lack of market competition.

“The biggest impediment is the cost of broadband. There's an opportunity here to intensify competition in the broadband telecommunications market. If costs come down, speeds improve, that takes out one impediment,” he told a press conference at the Public Policy in a Digital World Conference here today.

The report revealed that Malaysia has slower download speeds than most advanced economies. Malaysian consumers also pay more than consumers in most other Asean countries for similar mobile and fixed broadband plans. If Malaysia continues at its current rate of development, it will not have competitive speeds in the next decade.

The fixed broadband market is also especially concentrated.

In his speech, Deputy Finance Minister Datuk Amiruddin Hamzah said to increase ICT adoption, the government is committed to reduce the price of internet connectivity while ensuring higher speeds and better quality of services. He said many policies have already been put in place, though there is always room for improvement to address the slow internet connection, the relatively high cost for high-speed broadband and low digital adoption by businesses.

“We need to look from many dimensions of verticals of digital economy from talent development, education, taxation, employment, cybersecurity, e-commerce activities, start-ups companies and funding requirements, to digital free-trade zone,” said Amiruddin.

World Bank Group digital development specialist Siddharta Raja said it is possible for Malaysia to achieve double the broadband speeds at half the price, but this would still leave the country far behind the targets of other countries in the world.

“For Malaysia, which has been a pioneer in the digital space over the last decades, now is a chance to set ambitious targets, looking at what businesses will be in this future economy. It's possible to set even more ambitious targets and even achieve those,” said Siddharta.

Record said regulatory actions to expand coverage can help Malaysia transform its digital infrastructure. This includes enforcing regulations to use existing infrastructure more efficiently and enacting new policies to attract private capital to close coverage gaps.

With the digital economy growing faster than the overall economy, Malaysia's trading partners are updating their international tax frameworks to reflect the growing digital economy.

Malaysia's options for taxing the digital economy include an indirect charge on imported services, shoring up options for direct taxation, boosting compliance, and signalling intentions to increase certainty for the private sector.

“Taxation will have to happen at some point, because eventually more and more companies will be digital and governments around the world will have to make that leap (taxing the digital economies). We encourage policymakers to look at other countries. When they feel that the time is right, given the domestic situation, then consider doing something similar (taxation) to other countries.

“Malaysia is under fiscal pressure, it's important to ensure that the (taxation) system is future-ready,” said Record.


Sapura Energy looking at stake sale, rather than IPO, for upstream unit

PETALING JAYA: Sapura Energy Bhd president and CEO Tan Sri Shahril Shamsuddin said today it will look at selling a stake in Sapura Upstream Sdn Bhd, rather than a listing exercise, for certainty in timing and valuation.

The group's share price, which has taken a beating ever since it announced a rights issue to raise RM4 billion, was up two sen today to 35.5 sen with some 126.2 million shares changing hands, making it the most actively traded stock. The stock has fallen 77.81% for the last one year, underperforming the market benchmark FBM KLCI, which has gained 2.9% in the last one year.

The group announced today it has signed a heads of agreement (HoA) with Austria's OMV Aktiengesellschaft (OMV AG) to exclusively negotiate the sale of a 50% interest in Sapura Upstream, based on an enterprise value of US$1.6 billion (RM6.64 billion).

“We have explored all options including the potential listing of our upstream business. The invitation to enter into this strategic partnership with a leading oil and gas player serves our goals and aspirations better while providing certainty in timing and valuation,” Shahril said.

OMV AG is one of Austria's largest listed industrial companies with group sales of €20 billion (RM96 billion) and more than 20,000 employees.

The proposed strategic partnership will comprise Sapura Energy's portfolio of commercially viable gas assets offshore Sarawak, its acreage in new markets in New Zealand, the Gulf of Mexico and Australia.

Shahril said the partnership with OMV AG complements the group's continued strategy to grow its portfolio and expand acreage position.

“OMV AG's existing footprint offers new opportunities for our upstream segment and increases market reach for our services segment where OMV operates,” he added.

Furthermore, Shahril said the partnership will sharpen Sapura Energy's competitive advantage by leveraging on the strength of its portfolio of commercially viable gas fields offshore Sarawak and its acreage in new markets in New Zealand, Gulf of Mexico and most recently, Australia.

“In addition, OMV AG will benefit from Sapura Energy's in-house capabilities. Sapura Energy has been evaluating various options as part of the group’s broader strategic plan to strengthen its core businesses, boost its financial position and create better value for its shareholders,” he added.


MyEG unit secures recruitment licence from Labour Dept

PETALING JAYA: MyEG Services Bhd's sub-subsidiary Agensi Pekerjaan MyEG Jobs Sdn Bhd has received a licence to conduct matters relating to private employment agencies from the Department of Labour of the Ministry of Human Resources.

The licence, which is valid from Sept 1, 2018 to Aug 31, 2020, will allow its unit to carry out recruitment activities for a job seeker within and outside Malaysia and a non-citizen employee within Malaysia, the group told Bursa Malaysia today.

On Bursa Malaysia today, MyEG tumbled 13 sen or 7.97% to RM1.50 on volume of 67.5 million shares.