UMW reviving plans to list O&G business

Business Times | Tuesday, April 27, 2010, 10.53 AM

An executive director at UMW Corp says it is possible that the listing might happen this year or early next year

Car assembler UMW Holdings Bhd plans to make a fresh application sometime this year to list its oil and gas (O&G) business, an official said.

The diversified group, which now derives a fifth of its revenue from O&G activities, had two years back obtained the Securities Commission's (SC) approval for the listing.

However, it decided to put the plan on hold due to weak market conditions.

Those plans are now being revived, said Suseela Menon, an executive director at UMW Corp Sdn Bhd, a unit of UMW Holdings.

"We'd like to do a fresh submission (to the SC) sometime this year. That's our target. But exactly when it's going to be listed would depend on the market conditions," she told Business Times in an interview.

Suseela said it was possible that the listing might happen this year or early next year.

It is expected to be "a much bigger listing exercise" than it would have been two years ago as the group now has more companies under its O&G division, she said. There could be more than 30 such companies.

Also, a number of entities in the division which were not included in the original listing scheme have since become operational.

The original listing proposal had involved a public issue of 250 million new 50-sen shares and the exercise was expected to raise over RM400 million.

The listed company would have had a market value of above RM1.5 billion.

This time around, it is still too early to estimate how large the offering would be. A team of professionals is still working on the valuation and structure of the company to be listed, Suseela said.

"At the moment, most of our O&G companies are joint ventures. So the structure is very complicated. We need to move all the shareholders in these subsidiary joint ventures to the holding company, UMW Oil & Gas Bhd, so that the structure is much cleaner," she explained.

The company is expected to be one of the larger O&G companies on Bursa Malaysia once listed, she said.

The UMW group, which started its oil and gas business in 2002, has operations in 14 countries, including China, India, Indonesia and the Middle East.

If UMW Oil & Gas were to be listed this year, retail and institutional investors would certainly have their pick of O&G firms to invest in on Bursa Malaysia.

As it stands, two other sizeable firms belonging to oil giant Petroliam Nasional Bhd (Petronas) are expected to come to market this year, namely Malaysia Marine and Heavy Engineering Sdn Bhd and Petronas' petrochemical business.

Speculation is rife that tycoon Ananda Krishnan's O&G support services company, Bumi Armada Bhd, may be listed this year, too.