SAPURAKENCANA'S BOARD DELIBERATING ON DETAILS AND FACTS OF YINSON DEAL

12 Jul 2013 11:19

SERI KEMBANGAN, July 4 (Bernama) -- SapuraKencana Petroleum Bhd's board is deliberating

on the facts and details of the perceived conflict of interest in Kencana Capital Sdn Bhd's stake acquisition in Yinson Holdings Bhd.

Executive vice chairman Datuk Mokhzani Mahathir said Kencana Capital was providing the facts and details on the deal to SapuraKencana's board.

"Upon receiving it, they will decide on whether there is a conflict of interest or otherwise.

"But Kencana Capital on its part, has already declared its investment in Yinson," he told reporters after SapuraKencana's annual general meeting here today.

Also present were its chairman Datuk Hamzah Bakar and president and group chief executive officer, Tan Sri Shahril Shamsuddin.

Last month, Mokhzani, who is an non-independent executive director of SapuraKencana, had said there was no conflict of interest in the acquisition matter.

Kencana Capital is the investment vehicle of Mokhzani along with his long-time business partner, Yeow Kheng Chew, who is a non-independent executive director of SapuraKencana.

SapuraKencana is Malaysia’s biggest integrated oil and gas service provider by market cap, with investments in properties, including SapuraKencana’s new office tower, analysts said. On May 31, Yinson, a marine support services provider, proposed to issue and place out new shares to Kencana Capital, not exceeding 15 per cent of the previous enlarged share capital of 220.4 million shares.

Meanwhile, on outlook for SapuraKencana, Shahril expects earnings to be better this year as the group has a RM25 billion order book in hand to keep it busy over the next four years.

He said the group had also put in for bids worth about RM25 billion.

"We continue to bid in more regions and are also going in a big way into drilling.

"Drilling is 50 per cent of our Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA), and that significant for us, as it provide very strong visibility to our earnings," he added.

Shahril said the group continued to bid for projects in Brazil and India.

"We are moving into Indonesia and have started to hire staff in the US for operations in the Gulf of Mexico, where we were recently successful in competing for jobs.

"Mexico itself is going to be a focus for us," he added.

The group will also strive to make inroads into new markets such as Central America and West Africa.

"The rig business is very strong in EBITDA and this will help pay off debts. Our debt to EBITDA ratio is projected to come down to about 0.6 in two years," Shahril said.

-- BERNAMA

AMY AS