KUALA LUMPUR (Jan 19): UMW Holdings Bhd (UMWH) is exploring funding options for high-capital ventures as it looks to exit oil and gas (O&G) investments and refocus on its core businesses.
Its president and group CEO Badrul Feisal Abdul Rahim said options being considered include capital injection and equity financing exercises.
This would aid high-capital ventures such as UMWH's proposed new plant in Shah Alam, worth some RM1.1 billion and in partnership with Toyota Motor Corp.
The facility is reportedly targeted to be ready by 2018 with an expected production capacity of 50,000 vehicles annually.
Badrul was speaking this evening at a joint press conference with UMW Oil & Gas (UMWOG) and Ekuiti Nasional (Ekuinas) to announce a slew of corporate exercises that would see UMWH exit its investment in UMWOG, among others.
Meanwhile, UMWOG would consolidate its business with Ekuinas's O&G operations via two separate deals.
The first deal would see UMWOG acquire Ekuinas's 42.3% stake in Icon Offshore Bhd through issuance of new UMWOG shares at 80 sen apiece. The stake is valued at 50 sen per share.
This would spark a mandatory general offer from UMWOG for the remaining Icon Offshore shares at 50 sen each for either cash or UMWOG shares valued at 80 sen each.
Meantime, UMWOG would also acquire a 95.5% stake in privately held Orkim Sdn Bhd from Ekuinas for RM472 million, not including a debt repayment to Ekuinas of RM80 million.
For UMWH, it would distribute its 55.7% stake in UMWOG as dividend in specie to its shareholders.
Badrul says this is part of an overall plan to progressively exit the O&G sector. In addition to UMWOG, it still has some 12 privately held O&G subsidiaries.
"We hope to exit six or seven of these this year and the rest by next year," says Badrul.
UMWH is also expecting impairments from the strategic exit, although the quantum is still being assessed. It expects to finalise impairment figures by February.
