Published September 30, 2008
ST Engg US unit clinches US$393m navy deal
Phase II brings total contract value for overall missile craft project to US$642m
By VINCENT WEE
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ST Engineering's US shipyard unit VT Halter Marine has secured a US$393 million contract for Phase II of the Egyptian Navy's Fast Missile Craft (FMC) project. This new deal, in addition to another US$13.5 million awarded due to changes in work scope in Phase I brings the total contract value for the overall project for the three FMCs to US$642 million.
Work commences immediately, and delivery of the first FMC is expected by mid-2012 with full completion by April 2013. ST Engineering had previously announced on Dec 1, 2005 that it had secured the initial Phase I functional design contract for approximately US$29 million. At the time, it was estimated that the programme's value could grow to over US$450 million after Phase II was added.
Two subsequent contract modifications were awarded in November 2006 and June 2007 respectively for procuring the project's long lead items which added US$206.5 million to the contract. Subsequent changes in the scope of work further increased the Phase I contract value to the current US$249.2 million. The contract is from the US Navy for the Egyptian Navy under its Foreign Military Sales programme.
The FMCs are designed to perform coastal patrol, surveillance, interdiction, surface strike and naval battle group support for Egypt's naval needs of the future. These vessels will allow Egypt to maintain the security of its coastal regions for both itself and friendly countries, while denying access to the areas by any future adversaries.
Each vessel will be approximately 62 m in length and will incorporate ship signature control technology. High speed and manoeuvrability are two of the ship's primary assets to fulfil these roles. The vessels will also incorporate numerous combat systems and electronic sensors that give them capabilities in anti-aircraft, anti-surface and electronic warfare. The Egyptian Navy has been planning a programme since the mid-1990s to replace its ageing fleet of 21 Fast Attack Craft, most of which are past their effective service lives.
'VT Halter Marine is honoured to partner the US Navy in this Fast Missile Craft project. This Phase II contract award attests to the US Navy's growing trust in our design capability and sophisticated engineering forte,' said ST Marine president Chang Cheow Teck.
This contract is not expected to have any material impact on the consolidated net tangible assets per share and earnings per share of ST Engineering for the current financial year.
ST Engineering stock closed four cents lower at $2.60 yesterday.
Tuesday, 30 September 2008
Published September 30, 2008
Cut loss and abort BII bid, Maybank urged
Or strike new price given current crisis, adds minority shareholder group
By PAULINE NG IN KUALA LUMPUR
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MALAYSIA'S Minority Shareholders Watchdog Group (MSWG) wants Maybank to call it quits and cut its losses on the bungled Bank Internasional Indonesia (BII) deal rather than prolong the uncertainty for its shareholders.
'If the deal allows you to get out, cut your losses now,' MSWG chief executive Abdul Wahab Jaafar Sidek said of Maybank's proposed acquisition of BII, which went uncompleted after it missed last Friday's deadline.
Maybank yesterday requested a two-day trading suspension of its shares pending an announcement on the problem-plagued acquisition, which, in the over six months since the share sale agreement was inked, has been in a state of flux.
Last week's two new conditions set by the Malaysian central bank for a deadline extension and better pricing for the Indonesian bank could prove to be the final straw.
Mr Wahab said that MSWG's position is simple: the deal to buy Sorak Financial Holdings - which holds more than half of BII and is controlled by Fullerton Financial and Kookmin Bank - should not go through unless the price reflects present global market conditions.
Rather than pay 4.6 times book for BII, Maybank should only pay 2-3 times book given that big-name financial institutions are trading at steep discounts in the current financial crisis.
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Indeed, if a week is a long time in the sub-prime crisis, Maybank has belatedly discovered that six months is another era altogether.
In March, after its successful tender for Sorak, the country's biggest banking group by assets was brimming with confidence that it had sufficient cash and liquid assets to fund its RM8.6 billion (S$3.6 billion) purchase of BII and would only need to raise equity funds to maintain its capital adequacy ratio.
Maybank said that it had raised RM6 billion to fund its BII buy, but at this point would be paying more to borrow, bankers said.
Assuming Maybank were to raise RM12 billion in total capital (it also bought a fifth of Pakistan's MCB Bank for about RM3 billion), there would be further downside to its earnings due to higher borrowing costs, which would in turn result in weaker return on equity and long-term growth rates, Hwang-DBS Vickers observed in a client note.
In the time that it takes for Maybank to add value and to recover its investments, its capital adequacy ratio would also have to be maintained.
Concerned minority shareholders asked whether the bank would need recapitalisation and many other questions at its shareholder meeting last week which lasted four hours.
The MSWG had earlier demanded the board's resignation over the overpriced deal, and the Employees Provident Fund, which owns about 11 per cent of the bank, added to the chorus of protests at the meeting.
In reassessing the BII purchase in light of the worsening financial turmoil, Bank Negara last week voiced its concerns that Maybank's financial soundness at the agreed upon price of 510 rupiah (76.5 Singapore cents) per share, and the knock-on effect that a shaky Maybank would have on the country's banking system would necessitate a new agreement on price.
Fullerton did not respond to queries. Maybank's RM480 million deposit is likely to be forfeited, but Fullerton has also stressed it reserves its rights under the agreement.
Cut loss and abort BII bid, Maybank urged
Or strike new price given current crisis, adds minority shareholder group
By PAULINE NG IN KUALA LUMPUR
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MALAYSIA'S Minority Shareholders Watchdog Group (MSWG) wants Maybank to call it quits and cut its losses on the bungled Bank Internasional Indonesia (BII) deal rather than prolong the uncertainty for its shareholders.
'If the deal allows you to get out, cut your losses now,' MSWG chief executive Abdul Wahab Jaafar Sidek said of Maybank's proposed acquisition of BII, which went uncompleted after it missed last Friday's deadline.
Maybank yesterday requested a two-day trading suspension of its shares pending an announcement on the problem-plagued acquisition, which, in the over six months since the share sale agreement was inked, has been in a state of flux.
Last week's two new conditions set by the Malaysian central bank for a deadline extension and better pricing for the Indonesian bank could prove to be the final straw.
Mr Wahab said that MSWG's position is simple: the deal to buy Sorak Financial Holdings - which holds more than half of BII and is controlled by Fullerton Financial and Kookmin Bank - should not go through unless the price reflects present global market conditions.
Rather than pay 4.6 times book for BII, Maybank should only pay 2-3 times book given that big-name financial institutions are trading at steep discounts in the current financial crisis.
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Indeed, if a week is a long time in the sub-prime crisis, Maybank has belatedly discovered that six months is another era altogether.
In March, after its successful tender for Sorak, the country's biggest banking group by assets was brimming with confidence that it had sufficient cash and liquid assets to fund its RM8.6 billion (S$3.6 billion) purchase of BII and would only need to raise equity funds to maintain its capital adequacy ratio.
Maybank said that it had raised RM6 billion to fund its BII buy, but at this point would be paying more to borrow, bankers said.
Assuming Maybank were to raise RM12 billion in total capital (it also bought a fifth of Pakistan's MCB Bank for about RM3 billion), there would be further downside to its earnings due to higher borrowing costs, which would in turn result in weaker return on equity and long-term growth rates, Hwang-DBS Vickers observed in a client note.
In the time that it takes for Maybank to add value and to recover its investments, its capital adequacy ratio would also have to be maintained.
Concerned minority shareholders asked whether the bank would need recapitalisation and many other questions at its shareholder meeting last week which lasted four hours.
The MSWG had earlier demanded the board's resignation over the overpriced deal, and the Employees Provident Fund, which owns about 11 per cent of the bank, added to the chorus of protests at the meeting.
In reassessing the BII purchase in light of the worsening financial turmoil, Bank Negara last week voiced its concerns that Maybank's financial soundness at the agreed upon price of 510 rupiah (76.5 Singapore cents) per share, and the knock-on effect that a shaky Maybank would have on the country's banking system would necessitate a new agreement on price.
Fullerton did not respond to queries. Maybank's RM480 million deposit is likely to be forfeited, but Fullerton has also stressed it reserves its rights under the agreement.
Published September 30, 2008
Poll shows Anwar preferred as next PM, economy top concern
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(KUALA LUMPUR) Malaysian opposition leader Anwar Ibrahim scored better than the government's pick to become the next prime minister in an opinion poll which showed that worries over the economy dominated voter concerns.
Mr Anwar is threatening to unseat the government that has ruled Malaysia for 51 years and the rise of the opposition since their success in elections in March has paralysed policy-making as top politicians from the government jostle for power.
The poll by the Merdeka Centre published yesterday showed that for half of the people questioned, the main concern in this country of 27 million people is the economy at a time when fuel prices have risen and inflation has surged to 27-year highs.
Prime Minister Abdullah Ahmad Badawi, who has offered to quit early to avoid a leadership challenge, topped the poll, although his approval ratings continue to fall.
Asked who would make the better prime minister, 40 per cent said Mr Anwar and 34 per cent said Deputy Prime Minister Najib Razak. Mr Najib has been named as successor to Mr Abdullah, who scored 43 per cent.
Mr Anwar was characterised as 'a strong and visionary leader' and 'a competent manager of the economy' by 51 per cent of respondents in the poll of 1,003 voters.
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Mr Anwar has said that he has won over enough government MPs to oust Mr Abdullah in a confidence vote in Parliament and the prime minister last Friday said he would hand over power to Mr Najib, most likely next March.
A year ago, just 25 per cent of those questioned in a similar poll by Merdeka, an independent pollster, were worried about the economy, compared with 50 per cent now. -- Reuters
Poll shows Anwar preferred as next PM, economy top concern
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(KUALA LUMPUR) Malaysian opposition leader Anwar Ibrahim scored better than the government's pick to become the next prime minister in an opinion poll which showed that worries over the economy dominated voter concerns.
Mr Anwar is threatening to unseat the government that has ruled Malaysia for 51 years and the rise of the opposition since their success in elections in March has paralysed policy-making as top politicians from the government jostle for power.
The poll by the Merdeka Centre published yesterday showed that for half of the people questioned, the main concern in this country of 27 million people is the economy at a time when fuel prices have risen and inflation has surged to 27-year highs.
Prime Minister Abdullah Ahmad Badawi, who has offered to quit early to avoid a leadership challenge, topped the poll, although his approval ratings continue to fall.
Asked who would make the better prime minister, 40 per cent said Mr Anwar and 34 per cent said Deputy Prime Minister Najib Razak. Mr Najib has been named as successor to Mr Abdullah, who scored 43 per cent.
Mr Anwar was characterised as 'a strong and visionary leader' and 'a competent manager of the economy' by 51 per cent of respondents in the poll of 1,003 voters.
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Mr Anwar has said that he has won over enough government MPs to oust Mr Abdullah in a confidence vote in Parliament and the prime minister last Friday said he would hand over power to Mr Najib, most likely next March.
A year ago, just 25 per cent of those questioned in a similar poll by Merdeka, an independent pollster, were worried about the economy, compared with 50 per cent now. -- Reuters
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