EVENING 5: Sime Darby to buy stake in UMW for RM3.57 billion

The Edge TV

In today’s edition of Evening 5 — Sime Darby is offering to buy a 61.18% stake in UMW Holdings for RM3.57 billion in the biggest automotive deal in the country. Meanwhile, KLK is buying into Boustead Plantations and plans to take the company private

Transcript

00:00 [Music]

00:04 Saim Dhabi is buying a 61.18% equity interest in UMW Holdings from its parent,

00:10 Pemudalan Nasional, for RM5 per share in a deal worth RM3.57 billion.

00:16 The biggest automotive deal in the country will see Saim Dhabi launch a mandatory general offer

00:21 to buy the remaining shareholding of 38.82% and take UMW private.

00:26 The MGO is expected to roughly cost RM2.27 billion and values UMW at RM5.84 billion.

00:33 Saim Dhabi's Group CEO, Datuk Jeffrey Salim Davidson, explains that this will give it a

00:38 full presence across the spectrum by adding high-quality mass-market car brands to its

00:43 automotive portfolio. He points out that Saim Dhabi is largely a retailer and that the UMW

00:49 takeover would help it to plug the gap as Perodua and Toyota are largely in manufacturing and

00:55 distribution. It is worth noting that UMW is one of the largest automotive and industrial groups

01:00 in the country with strategic partnerships with global companies such as Toyota Motor Corp

01:05 and Komatsu. It also owns a 38% stake in Perusahaan Otomobil Kedua or Perodua.

01:12 As such, Jeffrey expects the acquisition of UMW to open up more opportunities for Saim Dhabi's

01:17 automotive segment in Malaysia and other international markets. Group CFO, Mustamir

01:22 Mohamed, says that Saim Dhabi will absorb UMW's debts totalling RM2.7 billion. It intends to

01:29 pare down UMW's borrowings by selling its stake in the healthcare JV that it has with Ramsey

01:34 Healthcare as well as selling a parcel of land it owns in Labu Sermban. Jeffrey said that the

01:40 group has yet to discuss with UMW on its future plans as it is still early days, dubbing the

01:45 acquisition as an engagement ceremony between the two parties. Meanwhile, Saim Dhabi saw its net

01:50 profit for FY2023 improve by 32% year-on-year to RM1.46 billion as its fourth quarter earnings

01:58 doubled. Revenue for FY2023 rose 14% year-on-year to RM4.83 billion from the RM42.5 billion posted

02:06 previously. The group also declared a total dividend payout of RM0.13 per share compared

02:11 with RM0.11.5 per share in FY2022.

02:19 Kuala Lumpur-Kepong has proposed to buy 739.2 million shares or 33% and 1 share in Baustat

02:26 Plantations for a total of RM1.15 billion or RM1.55 per share, valuing B-Plan at RM3.47 billion.

02:35 KLK also plans to take the company private via a mandatory general offer, confirming the EDGES

02:41 report. KLK entered into the Tripartite Strategic Collaboration Agreement with Baustat Holdings and

02:47 Lembaga Tambang Akatan Tentera on August 24, the group said in a BOSS filing. Baustat holds a 57.42%

02:55 stake in B-Plant, while LTAT holds a 10.59% stake in the planter. At RM1.55, the offer is at a 90%

03:03 premium to B-Plant's net tangible asset of RM1.30 and 13% premium to its last trading price of

03:10 RM1.37. The group said the objective of the SCA is to work together with Baustat and LTAT

03:17 towards the long-term objective of enhancing the operational efficiencies and CPO yields of the

03:23 plantations of B-Plant over the long term. LTAT CEO Dato' Ahmad Nazim Abdul Rahman called the

03:30 strategic collaboration timely, adding that it marks the beginning of the reset strategy for

03:35 Baustat, which will result in a significant value enhancement to the group. KLK CEO Tan Sri Lee

03:42 Uy Hian said the planter is optimistic that this corporate exercise will bring positive benefit for

03:47 Malaysia's palm oil industry as a whole. KLK plans to fund the exercise via a combination of bank

03:53 borrowings and internally generated funds, and bearing any unforeseen circumstances, is aiming

03:58 to complete the acquisition by the fourth quarter of 2023. Meanwhile, the two planters also reported

04:04 quarterly earnings today, where both saw softer numbers broadly due to lower CPO prices.

04:10 KLK saw its third quarter earnings plunge 85% to RM84.1 million from RM558.3 million as revenue

04:18 declined by 27% year-on-year to RM5.1 billion. B-Plant slipped into the red for its second quarter,

04:25 posting a net loss of RM5.5 million compared to a net profit of RM73.2 million the year before as

04:31 revenue fell by 42% year-on-year to RM201.2 million for the quarter under review.

04:37 The prosecution in Datin Sri Rosmah Mansoor's second criminal trial, where she is facing 17

04:48 charges of money laundering and tax evasion, told the High Court today that she has no independent

04:53 source of income, yet had large sums of money deposited into her current account that she has

04:58 in Afin Bank. Deputy Public Prosecutor Ahmad Akram Gharib said Rosmah was not gainfully employed,

05:05 but the prosecution noticed that the monies were deposited through Roslan Sohari, who was at the

05:10 time the residential house manager of Sri Pradhana Complex in Putrajaya. Akram said the first 12

05:16 charges concerning money laundering pertain to deposits to this account and they were never

05:20 disclosed as revenue and were deposited and utilised by her. The DPP said Rosmah had made

05:26 false statements concerning the monies paid into her account when she was questioned by Malaysian

05:31 Anti-Corruption Commission officers. The prosecution also stated that the totality of the evidence,

05:36 when considered as a whole, supports the "irresistible" inference that the deposits in

05:42 question were proceeds of unlawful activity. During the trial, a witness told the court that

05:47 he had deposited an envelope of cash totalling RM200,000 into Rosmah's account in June 2015.

05:54 Faisal Shamsuddin, who was the prosecution's second witness, said he was not aware that the

05:59 envelope contained cash until the bank officer had opened the envelope. Faisal once served as

06:05 operations manager in the Operations Management Department of the Sri Pradhana Complex while

06:10 Rosmah's husband, Datuk Sri Najib Razak, was still the PM.

06:19 Genting, Malaysia returned to the black in the second quarter, posting a net profit of $47.12

06:24 million compared with a net loss of $10.85 million a year ago, boosted mainly by a $182.2 million net

06:31 gain on disposal. It should be noted that since January 2022, Genting, Malaysia has been in the

06:37 red for four out of six quarters. Revenue grew by 14% year-on-year to $2.47 billion, driven by the

06:43 increase in volume of business by Resorts World Genting and higher contribution from Resorts World

06:49 New York and the improved operating performance of Resorts World Bimini. Genting, Malaysia declared

06:54 an interim single-tier dividend of $0.06 per share. For the first half, Genting, Malaysia

06:59 recorded $19.7 million net profit versus a $137.4 million net loss a year earlier, as revenue grew

07:06 22% year-on-year to $4.76 billion from $3.9 billion. On its outlook, Genting, Malaysia said

07:13 it will leverage its integrated resorts offerings to capitalize on the increasing inbound tourist

07:19 arrivals to Malaysia to drive incremental foreign visitation to RWG and continue to invest in the

07:25 infrastructure at Genting Highlands to elevate customer experience. In the U.S., Genting,

07:30 Malaysia says it remains focused on strengthening its leading position in the New York state gaming

07:35 market and continuing to closely monitor developments surrounding the New York Gaming

07:39 Board Facility Board's request for application to solicit proposals for up to three commercial casinos.

07:45 DRB Highcom saw its second quarter earnings plunge 80% to $33.7 million due to the absence

07:56 of asset disposal gains recorded in the previous year's corresponding period. In contrast, revenue

08:02 increased 12% year-on-year from $3.55 billion to $3.98 billion driven by its automotive segment,

08:09 mainly with contributions from Proton, automotive distribution companies,

08:12 and manufacturing and engineering companies. For the first half, net profit dipped by 1.5%

08:17 to $141.6 million, as revenue improved by 22% to $8.09 billion from the $6.62 billion posted

08:26 last year. Proton recorded a 28.6% increase in sales volume, with the Saga, X50 and Persona

08:33 contributing more than 80% of the national carmaker's total sales volume. Meanwhile, the

08:38 banking sector recorded a 37.3% increase in revenue in the first half to $806.8 million,

08:45 primarily due to higher financing income led by growth in financing volume. DRB Highcom said its

08:51 postal sector remains on track in its transformation roadmap, leveraging on technology to enhance

08:57 customer experience and continue to adopt prudent cost-control discipline. The conglomerate expects

09:03 a satisfactory financial performance for FY2023 compared with the previous year.

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