Kuala Lumpur, 19 January 2014 – Maybank Investment Bank Berhad (“Maybank Investment Bank”) is issuing eight new European style cash-settled call warrants (“CW”) over ordinary shares of Felda Global Ventures Holdings Berhad (“FGV”), Gas Malaysia Berhad (“GASMSIA”), Genting Plantations Berhad (“GENP”),
Kuala Lumpur Kepong Berhad (“KLK”), Kulim (Malaysia) Berhad (“KULIM”), MMC Corporation Berhad (“MMCCORP”), Petronas Chemicals Group Berhad (“PCHEM”) and UMW Oil & Gas Corporation Berhad (“UMWOG”). The warrants will be listed on Monday, 20 January 2014 with an issue size of 100 million each.
Palm oil export is a key contributor to Malaysia’s economy, contributing RM41.8 billion to the economy. Malaysia accounts for 39% of world palm oil production and 44% of world exports. With the strengthening US dollar, Malaysian palm oil exports have become more competitive in the international markets. As such, CPO average selling price (ASP) made a meaningful recovery in 4Q13 to ~MYR2,600/t (+MYR340/t YoY). Maybank Research believes the current CPO price is sustainable. Higher CPO and PK prices, lower fertilizer costs, and FFB recovery will be the key earnings drivers in 2014.
Felda Holdings Berhad (FHB), a 49% controlled entity of FGV, is the world’s largest producer of crude palm oil (CPO) based on production volume in 2012. FHB produced 3.3 million tonnes of CPO in 2012 and owns 71 palm oil mills and 5 palm oil refineries in Malaysia.
GENP currently owns 6 oil mills in Malaysia (1 in Peninsular Malaysia and 5 in Sabah). As at 31 December 2012, the GENP’s combined land bank is a combined 228,700 hectare. GENP is also involved in property development.
KLK is another plantation counter with significant exposure to the palm oil business. KLK boasts a plantation land bank of close to 250,000 hectares spread across Malaysia (Peninsular and Sabah) and Indonesia (Belitung Island, Sumatra, central and east Kalimantan). It is also involved in the oleochemical business in Malaysia, China and Europe.
“Malaysia’s oil and gas (O&G) sector is set to be driven further by Petroliam Nasional Bhd’s (Petronas) record five-year capital expenditure of RM300 billion, which will ultimately spill over to local offshore service providers with established track records. ”
Source: The Edge Malaysia, Petronas’ RM300 bil capex to drive Malaysian O&G sector in 2013, 3 January 2013
GASMSIA obtains its supply of LPG and natural gas from Petronas. It is the sole provider licensed by the Gas Supply Act, 1993 to supply and sell reticulated natural gas in Peninsular Malaysia.
MMCCORP, which owns a 30.9% effective interest in GASMSIA, also owns Malakoff and MMC Oil & Gas. Malakoff is the nation’s largest independent power producer (IPP) and MMC Oil & Gas is an engineering consultancy for the O&G and petrochemical industries.
PCHEM is a 64.4% subsidiary and a customer of Petronas. Petronas is a major supplier to PCHEM. The availability of supply of raw materials from Petronas to PCHEM is vital to PCHEM’s operations.
UMWOG is the sole Malaysian owner and operator of hydraulic workover unit (HWU) and a Petronas-licensed provider of HWU services. UMWOG has 4 HWUs in its fleet.
The call warrants have the following gearings, FGV-CT (4.99x), GASMSIA-CO (6.45x), GENP-CE (3.07x) KLK-CU (5.53x), KULIM-CQ (5.73x), MMCCORP-CR (3.20x), PCHEM-CW (4.61x) and UMWOG-CN (4.46x). The tenure of all eight CWs above is approximately 12 months.
The terms and conditions of the above call warrants are stated in their respective term sheets and investors should read the term sheets together with the Base Prospectus dated 2 October 2013 and the First Supplementary Base Prospectus dated 15 January 2014.