AirAsia’s Teleport, Gobi invest US$10.6m in EasyParcel

KUALA LUMPUR: AirAsia Group Bhd’s rebranded cargo and logistics platform Teleport and venture capital firm Gobi Partners have invested US$10.6 million (RM44 million) in e-commerce and parcel delivery player EasyParcel.

EasyParcel will use the Series B funding to expand its offering for SME customers, leveraging Teleport’s logistics and infrastructure capabilities, which include over 100 cities, 10,000 AirAsia flights per week and about one million tonnes of cargo capacity.

AirAsia group CEO Tan Sri Tony Fernandes (pix) said the investment enables it to make use of AirAsia’s under-utilised aircraft belly space for cargo.

Easy Parcel has close to 500,000 users. Headquartered in Penang, Malaysia, it also operates in Indonesia, Singapore and Thailand.

Ekuinas sells APIIT Lanka for RM41m

PETALING JAYA: Ekuiti Nasional Bhd (Ekuinas) has sold its entire equity interest, together with its minority partners, in APIIT Lanka Pvt Ltd to BG Investments Pte Ltd at an enterprise value of RM41 million.

“Ekuinas’ decision to divest APIIT Lanka is in line with its investment strategy to crystallise its assets when the time is right, as well as finding the right partner for the assets. With BG Investments, we are confident that with their local knowledge, expertise and resources, we see them as the right owners who will be able to take APIIT Lanka through their next growth phase,” Ekuinas CEO Syed Yasir Arafat Syed Abd Kadir said in a statement today.

He said APIIT Lanka has been growing steadily which contributed to one of Ekuinas’ key achievements, which was the opening of a new satellite campus in Kandy, giving APIIT Lanka the platform to scale the business by growing the number of programmes offered and tapping into a new market.

“We are pleased to report that the divestment generated a gross internal rate return of 17.5% and a money multiple of 2.2 times the capital invested. This will bring Ekuinas’ total realisation proceeds to more than RM2.7 billion,” he added.

Established in 2000, private tertiary education provider APIIT Lanka was an international collaboration between Asia Pacific University of Technology and Innovation (APIIT) in Malaysia and ExpoLanka Holdings PLC, with links to universities in the UK and Australia.

APIIT Lanka aims to provide higher education of international standards to produce globally competitive graduates who will meet the demands of the modern society. Since its establishment, APIIT Lanka has produced close to 2,000 graduates.

BG Investments is a Sri Lankan-based investor with exposure in industries such as financial services, marine, education and healthcare. The group has identified education as a high potential sector in Sri Lanka and intend to expand their footprint in this sector through the acquisition.

Malaysia keeps August crude palm oil export duty at zero percent

KUALA LUMPUR: Malaysia kept its export duty on crude palm oil for August unchanged at zero percent, according to a circular on the Malaysian Palm Oil Board’s website on Tuesday, citing the national customs department.

The duty has been at zero percent since September.

Malaysia, the world’s second-largest producer of palm oil, calculated a palm oil reference price of 1,905.38 ringgit ($463.93) per tonne for August. Any price above 2,250 ringgit incurs a duty.

The Southeast Asian nation said in May it would defer the imposition of export duties on crude palm oil to Dec. 31 in efforts to boost palm oil exports and expand into new markets.

Malaysian benchmark palm oil futures were down 0.4% at 1,981 ringgit per tonne in early trade on Tuesday.

Telcos drag Bursa Malaysia to trade lower at mid-morning

KUALA LUMPUR, July 16 — Bursa Malaysia weakened further at mid-morning, dragged down by selling in telco counters. Digi lost five sen to RM5.0, Maxis fell four sen to RM5.64 and Axiata was three sen easier at RM5.16. These three counters…

Berjaya Land buying 75% stake in Iceland hotel operator for RM220m

PETALING JAYA: Berjaya Land Bhd (BLand) is acquiring a 75% stake in Icelandair Hotels ehf for US$53.63 million (RM220 million) cash.

BLand told Bursa Malaysia that its subsidiary Berjaya Property Ireland Ltd had entered into a share purchase agreement with Icelandair Group hf for the acquisition.

Icelandair Hotels currently operates 20 hotels located all around Iceland. In addition, a new five-star 145-room hotel developed in collaboration with Hilton Hotels is scheduled to be launched in Reykjavik’s Parliament District in 2020. The total earnings before interests, taxation, depreciation and amortisation of these hotels was about US$12 million for the financial year ended Dec 31, 2018.

Iceland Stock Exchange-listed Icelandair Group operates in the airline and tourism sectors. The company operates through three segments: international flight operations, aviation investments, and tourism investments.

Besides increasing Berjaya’s presence in the European region, this acquisition also increases the room inventory of the Berjaya group of hotels from about 4,200 to 6,011 rooms, with an additional 1,811 rooms. Currently the Berjaya group of hotels are operated under the Berjaya Hotels and Resorts, Four Seasons, and Sheraton brands in Europe and Asia.

BLand said the proposed acquisition is in line with the group’s geographical diversification and revenue expansion. The luxury hotel segment in Iceland is expected to grow and the exercise will enable the BLand group to enter this segment with strategically located hotels in the heart of Iceland as well as certain hotels being operated under the Hilton brand name.

Berjaya Corp Bhd founder and executive chairman Tan Sri Vincent Tan is pleased with this investment, which is at a low entry cost, with an average cost/price of about US$75,096 per room.

“The Icelandair Hotels is one of the largest hotel chains in Iceland, and its hotels are operated at a very high standard by a passionate and dedicated team. We are delighted to add this hotel group to our growing network of hotels and resorts,” he said in statement.

“We look forward to working with the Icelandair Group. I believe this investment represents good long-term value for Berjaya,” he added.

The proposed acquisition is expected to be completed during the financial year ending June 30, 2020.

Invest Selangor targets RM250m transaction value at business summit

PETALING JAYA: Invest Selangor is targeting RM250 million in transaction value from its Selangor International Business Summit (SIBS) 2019, according to Selangor Mentri Besar Amirudin Shari.

Last year, it achieved RM194.6 million in terms of businesses negotiated and committed during the summit.

“2019 will see the inaugural Research & Development and Innovation Expo organised by our human resources management division, which will bring additional value to the summit this year,” Amirudin said at a press conference today in conjunction with the launch of SIBS 2019.

In addition, this year’s event will see more exhibitors and agencies participating compared to the previous year.

The third edition of SIBS will take place from Oct 10 to 13 at the Malaysia International Trade & Exhibition Centre, Kuala Lumpur.

On the whole, Selangor has a total investment inflow target of RM10 billion for the year. For the first quarter of the year, the state has accumulated an investment of RM1.5 billion, the fourth highest in Malaysia.

“Our target for this year is a little more conservative compared to the RM18.9 billion achieved last year. It’s not just about the number, but we need to get quality international investors, that is why we’re focusing on five high-technology clusters, machinery, transportation, food & beverage, life sciences and electric & electronics,” said Amirudin.

He explained that the state does not simply accept any investment but it takes the five clusters as guideline based on its infrastructure and skilled labour.

However, there are challenges for Selangor to achieve its goals, with connectivity being an issue in terms of infrastructure and internet as there is a huge gap between the rural and urban areas in the state.

“The infrastructure gap is a major stumbling block for Selangor to reach its goal to be a Smart State by the year 2025.”

“Another challenge is education, whereby entrepreneurs and industry players have to change from conventional production to embrace Industrial Revolution 4.0 by adopting IoT (Internet of Things) and smart solutions to reach the smart state goal.”

By achieving that goal, the mentri besar is confident that Selangor could make the leap from being the most attractive investment destination in the state to being the most attractive destination in the Asean region.

Chin Hin to list associate Atlantic Blue on ACE Market

PETALING JAYA: Chin Hin Group Bhd announced its plan to list its 45%-owned associate company Atlantic Blue Sdn Bhd (ABSB) on the ACE Market of Bursa Malaysia.

This will be done via its special purpose vehicle Solarvest Holdings Bhd (SHB).

According Chin Hin’s filing with Bursa Malaysia, the proposed listing involves SHB acquiring the entire share capital of ABSB for RM26.26 million.

“The purchase consideration of RM26.26 million is intended to be fully satisfied by issuance of 291.79 million new ordinary shares in SHB at an issue price of approximately 9 sen per share.”

Recall that the vendors of ABSB had on Jan 30, entered into a conditional sale and purchase agreement (SPA) with SHB in respect of the proposed acquisition.

The agreement was completed on July 15 and SHB has become a 45%-owned associate company of Chin Hin.

The proposed listing is subject to approvals from the relevant authorities. Chin said it will make further announcement in relation to the proposed listing, as and when appropriate under the Main Market Listing Requirements of Bursa Securities.

Wider credit spectrum needed for bond issuance

KUALA LUMPUR: There is a need to widen the credit spectrum to create a more diversified capital market, particularly in bond issuance as most are skewed towards higher credit rating issuances such as AA and AAA-rated.

Danajamin Nasional Bhd CEO Mohamed Nazri Omar said most of the bonds in the market are higher rated such as AAA and AA, mostly comprise of government or large corporates.

“Our market doesn’t have A-rated (bonds) that much. The credit spectrum is so skewed towards AA and AAA now. There’s no diversity in that,” he told reporters at the RAM-SIDC Bond Conference “Fresh Perspectives: Engineering the Future of the Malaysian Bond & Sukuk Market” today.

A-rated bond is still considered investment grade, or bonds that carry low to medium credit risk.

Nazri explained that a developed market should have the ability for issuers with a diverse credit spectrum to issue their bonds/sukuk on a standalone basis. Right now most A-rated corporates are unable to issue without some form of credit enhancement.

He added that the concern of investors is the liquidity or tradeability of A-rated bonds, and not so much on the credit aspect. This means that when there is a need for investors to sell their bonds, can they sell it without incurring huge market loss?

“In terms of issuance, the market is going to develop. There will be more and more issuances because the market is deep enough to help corporate issuances. Liquidity is the issue. We have to talk to regulators, investors, bankers on how to create more market making opportunities.

“Having the market making post issuances will create liquidity, that is if I want to sell, I can sell. The price discovery is also better,” said Nazri.

Describing it as a chicken and egg situation, he said to boost liquidity is to encourage players to buy and sell, but players are also caught in situations concerning their risk appetites.

From the macro perspective, the bond and sukuk market’s ability to provide cost-efficient long-term financing to both the public and private sector makes it integral to the economic development and market resilience.

Securities Commission Malaysia chairman Datuk Syed Zaid Albar said while the bond and sukuk market is deep, the credit profile is relatively narrow, with RM384 billion in papers rated as investment grade as at June 2019.

“This has important policy implications, as the inability of lower-rated issuers to access the bond market may result in an inequitable two speed financial system, where lower rated issuers face constraints in accessing both market based and non-market based financing,“ he said in a special address during the conference.

He added that this may impact the ability of Malaysia’s emerging corporates to scale up and grow into future blue-chip companies.

”This is no doubt a complex and multi-faceted issue, which requires market-based solution so as to avoid potentially adverse long term implications for the capital market at large. For such issuers to come to the market, they must be confident that sufficient demand exists from investors with the necessary risk capabilities and appetite for non-investment grade papers,” said Syed Albar.

Malaysia has one of the deepest bond markets in Asia, with bonds and sukuk outstanding amounting to RM1.49 trillion as at end-June 2019. From a comparison perspective as a percentage of GDP, the Malaysian bond market remains third largest in Asia ex-Japan as at end-2018. As at end-2018, Malaysia accounted for 50.4% of the world’s total sukuk outstanding.

Despite periodic bouts of volatility in the broader market, financing activities in the corporate bond and sukuk market remain relatively resilient, with RM78.4 billion raised in the first six months of 2019. The half-year performance is close to 2018’s full-year tally of RM105.4 billion.

Khazanah exits Shoaiba group with healthy profit

KUALA LUMPUR: Khazanah Nasional Bhd said it made a healthy profit from the divestment of its 40% stake in Malaysian Shoaiba Consortium Sdn Bhd to Malakoff Corp Bhd for US$70 million (RM288 million).

“As the project is completed and fully operational, Khazanah has achieved the commercial objectives of its investment in the consortium,“ Khazanah said in a statement today.

Khazanah entered into a joint investment in 2005 with Malakoff Corp Bhd and Tenaga Nasional Bhd, via the consortium, to support Malaysia’s entry into Saudi Arabia’s independent water and power producer market.

In accordance with the consortium’s shareholders agreement, Khazanah’s 40% stake was offered to the existing partners and Malakoff subsequently took the offer.

“Khazanah assesses all opportunities for divestment against set financial and strategic targets. Assets may be considered for divestment once the intended investment objectives and targeted returns have been achieved, as is the case with the divestment of our stake in the consortium.

Divestments may also depend on the strength of the market, as well as the availability, quality and credibility of buyers.”

Under the refreshed mandate, Khazanah said it operates on a two-fund model – a commercial fund and a strategic fund. In general, its commercial fund is focused on creating a global portfolio that diversifies its assets and income for the country’s benefit, while strategic fund focuses on strategic domestic investments, particularly in infrastructure.

“The proceeds from the divestment of our stake in the consortium, like all other divestments by Khazanah, are reinvested based on the objectives of the two funds or are used to repay existing debts on our balance sheet.”

For the year to date, Khazanah has committed investments amounting to RM1.4 billion and reduced overall debt by RM6.4 billion, in line with its corporate strategies.

“We further expect to undertake more investments in the second half of 2019, based on the opportunities that we are exploring,“ it said.

George Kent water meter biz gets Honeywell boost

PETALING JAYA: George Kent (Malaysia) Bhd, via its wholly owned subsidiary George Kent International Pte Ltd, has entered into a long-term licence agreement with Honeywell to bolster its water meter production business.

According to the group’s filing with Bursa Malaysia, the agreement includes the technology and know-how to manufacture high-precision water meter measuring components for the V100 and V110 C-Class volumetric water meters. It also includes the transfer of associated machinery and tools.

Currently, it imports Honeywell precision measuring components and registers which are then assembled with the brass housings manufactured by the group.

The agreement allows George Kent to exclusively sell the products under its GKM trademark and George Kent brand name to 26 territories, including 15 new territories in the Asia region, allowing further opportunities for growth.