Sime Darby okays Ramunia takeover, say sources
The Sun (Financial Daily)
28 September 2006

Sime Darby Bhd is believed to be proceeding with a planned acquisition of an over 50% stake in Ramunia Holdings Bhd from the latter’s chairman Datuk Azizul Rahman Abdul Samad, and a subsequent mandatory general offer for all the shares in the oil and gas fabricator.

Sources said Sime Darby would undertake the acquisition directly, instead of via its subsidiary Sime Engineering Bhd as had been earlier speculated, as the process would be more expedient without the need to go through shareholders’ approval.

A source told FinancialDaily: “Sime Darby may consider merging Ramunia with Sime Engineering after the takeover exercise is completed.”

The price tag for the deal has been speculated as RM750 million based on the RM1.20 offer for each of its entire share capital of RM236.73 million of 50 sen each, 164 million irredeemable convertible unsecured loan stocks (ICULS), and 100.65 million irredeemable convertible preference shares (ICPS), and 65 sen for each its 230 million warrants.

Despite the lower market prices of the ICULS and ICPS compared with the RM1.20 offer, all convertibles are to be treated as ordinary shares as stipulated under the takeover code. Yesterday, the ICULS and ICPS closed at 99.5 sen and 72 sen respectively.

However, it is learnt that the offer price could be lower than RM1.20.

According to the latest Bursa Malaysia data, Azizul Rahman holds 50.8% of Ramunia via Ramunia Energy & Marine Corp Sdn Bhd (Remcorp).

Sime Engineering had earlier been mentioned as the buyer of the stake but the company in reply to a Bursa Malaysia query said it was not in any discussion for the acquisition of shares in Ramunia. In a separate statement, Ramunia said it was unaware of plans by Sime Engineering to acquire the company.

However, Sime Engineering had said it would “consider opportunities for viable acquisitions or projects to expand and consolidate its businesses.”

Earlier, Ramunia has proposed to undertake a private placement of 45.5 million shares, representing 19.2% of its paid-up capital and a renounceable restricted issue of up to 68.4 million shares at RM1 each to all shareholders except for Remcorp and its related parties.

The Edge weekly, in its latest issue, reported that the key to the Sime Darby group’s interest in Ramunia lay in the latter’s fabrication yards in south Johor: Sime Engineering is currently leasing a yard from Remcorp that sits sandwiched between two yards that are owned by Ramunia and the tenancy expires at year-end.

In a deal announced last July, Ramunia is in the midst of acquiring the 32ha yard from Remcorp for RM135 million comprising RM75 million cash and 43.8 million shares at RM1.37 each.

A source told FinancialDaily that it would take up to three years fo Sime Darby to set up a fabrication yard of its own. “With Sime Engineering’s expanding order book, it makes sense for Sime (Darby) group to take over Ramunia,” he said, adding that it can ward off foreign interest in taking over Ramunia as well.

It has been reported that Sime Engineering’s order book now stands at RM2.4billion, which could rise to RM3 billion by year-end with additional incoming projects.