Naim may divest part of Dayang stake to unlock value

KUCHING: Naim Holdings Bhd may divest part of its equity interest in Dayang Enterprise Holdings Bhd to reap profit from the investment.

Naim managing director Datuk Hasmi Hasnan said that partial divestment of its 33.6% stake in associate Dayang to unlock value was one of the options being looked at.

However, he declined to say if Naim had been approached by any potential buyers for its prized asset.

Naim, Sarawak’s top property developer, is Dayang’s single largest shareholder. At the current price of RM4.85 per share, Dayang has a market capitalisation of some RM2.67bil, with Naim’s stake in the integrated oil and gas service provider translating to about RM890mil.

According to Hasmi, Naim’s total investment (plus subscription to rights shares) in Dayang amounted to about RM150mil. This means almost 600% in returns from the investment.

“Dayang was priced at about RM2 (a share) about a year ago when its order-book was at RM1.2bil. With the current order-book increasing to RM5.1bil, the share price of RM5 still looks very good,” he told StarBizafter Naim’s AGM here on Friday.

The contracts include more than RM2bil from Sarawak Shell Bhd/Sabah Shell Petroleum Co Ltd (which HLIB puts at RM2.5bil) and RM313.6mil from Murphy Sarawak Oil Co Ltd. Although Dayang did not state the value of a third contract from Petronas Carigali Sdn Bhd, HLIB believes it is worth over RM1bil.

Hasmi said with Dayang’s big order-book, Naim could look forward to getting more dividend payouts from the associate firm.

On another note, Hasmi said there would not be any problems for Naim to redeem its medium-term note (MTN) facility when it is due from early next year, as the company had cash reserves of some RM200mil.

Naim has drawn down RM300mil of its RM500mil MTN facility in three tranches.

Hasmi said the first tranche of RM150mil would be due in February 2014, the second tranche of RM125mil in September 2016 and the third tranche of RM25mil in 2021.

With ongoing contracts worth some RM800mil, Naim is optimistic that its construction arm stands to win some of the new contracts it has bid for.

“We have tendered for about RM500mil worth of projects and we are quite confident of something good coming soon. But it is premature to announce anything now,” he said.

Naim’s current contracts include two packages for the construction of six elevated stations for the Klang Valley mass rapid transit (MRT), worth a total RM412mil.

The MRT contracts mark Naim’s foray into Peninsular Malaysia.

Naim is currently undertaking an ambitious mixed property development project in Bintulu called Bintulu Paragon, which has a gross development value of RM2bil. Phase One comprises a street mall and small offices versatile offices or sovo.