Published August 24, 2009

Naza brothers stepping out of dad's shadow

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(KUALA LUMPUR) It was a deal that everyone thought was pretty straightforward.

Without the Naza group's involvement, Kumpulan Jetson's fortune will pretty much depend on what the brothers and their partners want to do.

Two brothers, sons of the late Nasimuddin Amin, and their partners had bought a third of Kumpulan Jetson Bhd, a small construction and manufacturing outfit, for RM12.3 million (S$5.03 million), the Malaysian Business Times reported.

The Naza Group will probably inject some of its assets into Kumpulan Jetson. The group is large and it had gone after listed companies before, most notably DRB-Hicom Bhd and Proton Holdings Bhd. But suddenly, the brothers said this was personal.

Personal means not part of the family business. Now this is different. Without the Naza group's involvement, Kumpulan Jetson's fortune will pretty much depend on what the brothers and their partners want to do. There are not much clues to go by.

For one, they want to keep Kumpulan Jetson listed. That should be fairly easy since the stock has shot up above its offer price of 70 sen. This means that despite a mandatory general offer on the table from the new investors, minorities won't rush to accept the general offer.



Secondly, the brothers picked a company that makes car parts as well as builds and develops properties. This is familiar territory as they grew up with a man who built Malaysia's biggest private motor vehicle group and amassed a fair bit of properties locally and abroad.

The big question is why are they doing this if the Naza group is not involved? Won't it distract them from running the group? Mr Nasaruddin is head of the group and Mr Faliq runs the property business.

Although there are signs of recovery, the economy is still going though a rough patch. We have probably passed through the worst of the storm, but the storm hasn't subsided.

A closer look also shows that Kumpulan Jetson is not in good shape financially. Its turnover has fallen every year since 2004 and it has made money in only two of the last five years.

Although it has more in current assets or money that will come in within a year, than current liabilities, almost three-fourths of the assets are receivables, which may take longer to collect in the current climate.

Jetson doesn't have much cash, about RM5 million as at June 30 this year, versus debt of more than RM40 million.

The bulk or almost 90 per cent of Jetson's total assets are tied up in the receivables and its plant and a concession asset. It has a 25-year contract to operate a hostel for Universiti Putra Malaysia.

So we're back to the first question of why. Why take over this company if Naza Group does not figure in the whole scheme of things.

One possible explanation is that the brothers are out to prove that they can make it on their own without the might of Naza Group behind them. The sons want to step out of their late father's long shadow.