ICON (5255) - Icon Offshore seals merger deal with UMW O&G
KUALA LUMPUR (Jan 19): Icon Offshore Bhd, which is controlled by Ekuiti Nasional Bhd (Ekuinas), and UMW Oil & Gas Corp Bhd (UMW OG) is believed to have sealed a merger exercise, according to industry sources.
UMW OG is a 55.7%-owned subsidiary of UMW Holdings Bhd, in which Permodalan Nasional Bhd controls a 47.83% stake. Ekuinas holds controls a 44.69% stake in Icon Offshore through Hallmark Odyssey Sdn Bhd (42.28%) and Sempena Focus Sdn Bhd (2.41%).
The merger of the two government-linked entities will then kickstart the consolidation wave in the domestic oil & gas (O&G) industry, which has been on the downturn for the past two years, said industry sources, adding that more merger and acquisitions will be in the pipeline.
However, the detail of the merger exercise between UMW O&G and Icon Offshore is not known at the time of writing.
Icon Offshore, UMW Holdings and its O&G unit have voluntarily suspended their shares from trading this morning.
The three companies’ filing to Bursa Malaysia this morning said the suspensions are pending material announcements.
The current downturn in the O&G industry has stressed many domestic players financially, given the overcapacity in the offshore supportive services, industry sources said.
The consolidation in the process will help to strengthen the local players and to form sizable O&G outfits to compete in the international arena, according to industry sources.
Icon Offshore share price has jumped 45% since late November, from 31 sen to a peak 18-month high of 45 sen on Monday. In the good heydays when the crude oil prices were above US$90 per barrel, the stock was trading at above RM1.80.
On Dec 27 last year, Icon Offshore was awarded a RM5.6 million contract to provide one straight supply vessel to EQ Petroleum Production Malaysia Ltd for the Seligi/PM 8 (Extension) oil field offshore Peninsular Malaysia.
Over at UMW O&G, its share price has climbed from the all-time low of 75 sen in December last year. It touched the high of 93 sen early this month. It was last traded at 89 sen, before the suspension.
UMW O&G’s share price has been battered down badly in the past three years. From its peak of RM3.91 in 2014, it slumped to an all-time low of 75 sen in December last year.
UMW O&G has recorded losses for four consecutive quarters, with a whopping RM409.13 million in losses for the fourth quarter of the financial year ended Dec 31, 2015. For the nine-month period ended Sept 30, 2016, the oil rig owner posted a net loss of RM267.76 million.
ICON (5255) - Icon Offshore seals merger deal with UMW O&G
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