Naim Cendera Holdings Bhd will pay RM87.8mil cash for a 45% stake in Dayang Enterprise Group, marking the property development and construction company’s foray into the oil and gas (O&G) industry.
Naim Cendera managing director Datuk Hasmi Hasnan and Dayang Enterprise managing director James Ling Suk Kiong signed the sale and purchase agreement yesterday. The signing was witnessed by Sarawak Chief Minister Tan Sri Abdul Taib Mahmud.
Hasmi said the acquisition, expected to be completed in six months, would be paid for through internal funds and bank borrowings.
He said Miri-based Dayang Enterprise was an integrated O&G service provider and it was expected to contribute about 15% to Naim Cendera group’s net profit in the next financial year.
Dayang Enterprise posted a group pre-tax profit of RM31.2mil last year.
From left: James Ling, Dayang MD Tengku Yusof Tengku Ahmad Shahruddin, Tan Sri Abdul Taib Mahmud, Naim chairman Datuk Hamed Sepawi, and Datuk Hasmi Hasnan
“The company had completed contracts worth RM1.2bil between 1991 and 2006. It has an order book of about RM400mil,” Ling added.
Dayang Enterprise, which has been profitable since 2002 with an average annual pre-tax profit of over RM30mil, is studying the possibility of a Bursa Malaysia listing.
The group’s core businesses are in the maintenance of offshore topside structures, pipes and valves, electrical and instrumentation, fabrication as well as hook-up and commissioning services for the O&G industry in Malaysia.
It owns two marine vessels and a supply ship. It also charters vessels to provide floating accommodation and catering services and rents equipment and machinery to oil companies.
Dayang Enterprise’s major customers are Sarawak and Sabah Shell, Petronas Carigali and ExxonMobil.
“The partnership with Naim Cendera will enable Dayang Enterprise to do bigger things. We plan to venture into onshore fabrication and offshore marine engineering jobs,” Ling said.
An AmResearch analyst told StarBiz that it looked like a good acquisition for Naim Cendera as its purchase of Dayang Enterprise was priced at about six times the latter's 2008 earnings. This is cheap compared with an average of 20 times in the valuation of listed O&G companies.
“It's a totally different business for Naim Cendera but it will acquire the expertise that is in Dayang Enterprise, which in turn can leverage on Naim Cendera's balance sheet which is quite strong,” the analyst said.
Naim Cendera managing director Datuk Hasmi Hasnan and Dayang Enterprise managing director James Ling Suk Kiong signed the sale and purchase agreement yesterday. The signing was witnessed by Sarawak Chief Minister Tan Sri Abdul Taib Mahmud.
Hasmi said the acquisition, expected to be completed in six months, would be paid for through internal funds and bank borrowings.
He said Miri-based Dayang Enterprise was an integrated O&G service provider and it was expected to contribute about 15% to Naim Cendera group’s net profit in the next financial year.
Dayang Enterprise posted a group pre-tax profit of RM31.2mil last year.
From left: James Ling, Dayang MD Tengku Yusof Tengku Ahmad Shahruddin, Tan Sri Abdul Taib Mahmud, Naim chairman Datuk Hamed Sepawi, and Datuk Hasmi Hasnan
“The company had completed contracts worth RM1.2bil between 1991 and 2006. It has an order book of about RM400mil,” Ling added.
Dayang Enterprise, which has been profitable since 2002 with an average annual pre-tax profit of over RM30mil, is studying the possibility of a Bursa Malaysia listing.
The group’s core businesses are in the maintenance of offshore topside structures, pipes and valves, electrical and instrumentation, fabrication as well as hook-up and commissioning services for the O&G industry in Malaysia.
It owns two marine vessels and a supply ship. It also charters vessels to provide floating accommodation and catering services and rents equipment and machinery to oil companies.
Dayang Enterprise’s major customers are Sarawak and Sabah Shell, Petronas Carigali and ExxonMobil.
“The partnership with Naim Cendera will enable Dayang Enterprise to do bigger things. We plan to venture into onshore fabrication and offshore marine engineering jobs,” Ling said.
An AmResearch analyst told StarBiz that it looked like a good acquisition for Naim Cendera as its purchase of Dayang Enterprise was priced at about six times the latter's 2008 earnings. This is cheap compared with an average of 20 times in the valuation of listed O&G companies.
“It's a totally different business for Naim Cendera but it will acquire the expertise that is in Dayang Enterprise, which in turn can leverage on Naim Cendera's balance sheet which is quite strong,” the analyst said.