Ramunia to fund expansion via equity, debt
Business Times
13 June 2007

Of the RM360 million for expanding the fabrication yard in Johor, about RM180 million is from debt and the remaining half from the equity side, says Ramunia's chairman.

RAMUNIA Holdings Bhd, an oil and gas sector infrastructure builder, will use an equal mix of equity and debt to fund a on-going RM360 million expansion at its existing fabrication yard in Johor.

A planned transfer to Bursa Malaysia's main board next year is also on the cards to further raise the profile of the second board-listed Ramunia, especially among institutional investors.

But shareholders' dividends is unlikely for current fiscal 2007 as the company intends to pump its earnings back into its business.

"Of the RM360 million, about RM180 million is from debt and the remaining half from the equity side. We are going for the main board, and Ramunia's privatisation is a rumour."

"We are reinvesting everything we have back to the company. It is a growing company," Ramunia chairman Datuk Azizul Rahman told reporters after the company's shareholders meeting in Kuala Lumpur yesterday.

Shareholders' had earlier approved a private placement of 45.5 million new shares in Ramunia at RM1.20 apiece to raise RM54.6 million.

The money, part of which forms the equity-funding portion for its Teluk Ramunia-based fabrication yard expansion, will part finance the two-year initiative. The job is due for completion by October 2008.

Bonds, however, may not be a part of the modernisation plan's debt package which will be dominated by bank loans, said Azizul.

Ramunia's fabrication yard improvements involve infrastructure upgrades, and land purchase, costing some RM200 million and RM108 million respectively. Meanwhile, about RM50 million will be used as working capital.

Once finalised, the yard's size will almost double to some 68ha from the present 36ha. Fabricaton capacity is expected to more than double (171 per cent) to 84,000 tonnes, according to Ramunia's circular to its shareholders.

Market chatter has it that Ramunia Energy & Marine Corp Sdn Bhd, the single-largest shareholder with a 50.5 per cent stake in Ramunia, may take the latter private and re-list it abroad.

Ramunia's net profit more than quadrapled (by 317 per cent) or 2.1 sen a share to RM5 million in the first quarter to January 31 2007. Revenue, meanwhile, more than doubled to RM82.7 million.

Its borrowings stood at RM173.3 million as at last January.

The fabricator, with some RM1.3 billion worth of outstanding jobs, is bidding for global projects valued at some RM4.5 billion.

Ramunia shares closed unchanged at RM1.60 yesterday, its highest in six months, for a market capitalisation of RM381.8 million.

The stock's price had risen 39 per cent so far this year, outperforming the benchmark Kuala Lumpur Composite Index's 24 per cent rise.