MMC gets shareholders' nod to acquire NCB Holdings

KUALA LUMPUR: MMC Corp Bhd, which received shareholders' approval to increase its stake in NCB Holdings Bhd yesterday, may consider spinning off its port operations in future, managing director Datuk Seri Che Khalib Mohammad Noh said.
Asked whether it will spin off and list its port business, Che Khalib said there are no immediate plans to do so but it is an option that the group may consider later.
"We are quite happy with the result of the voting today, where 99.99% of shareholders supported our proposed acquisition of NCB. We strongly believe that we should be able to create value out of this acquisition and it will be good for MMC," he told reporters at its EGM yesterday.
Shareholders voted at an EGM yesterday for the proposed acquisition of 251.2 million NCB shares representing 53.42% equity interest in NCB by MMC Corp's wholly owned subsidiary, MMC Port Holdings Sdn Bhd.
MMC Port is acquiring the shares from Permodalan Nasional Bhd and AmanahRaya Trustees Bhd for RM1.1 billion or RM4.40 per share.
Upon completion of the acquisition, MMC's stake in NCB will increase from 30.13% to 83.55%, triggering a mandatory general offer (MGO).
MMC Port will extend an MGO to acquire all the remaining 77.4 million NCB shares that it does not already hold, representing 16.45% of equity interest in NCB at an offer price of RM4.40 per share. The maximum consideration for the MGO is RM340.5 million.
NCB fully owns Northport (M) Bhd, a major gateway for import and export of containers located in Port Klang. NCB also operates a haulage-cum-logistics business via its subsidiary, Kontena Nasional Bhd.
MMC owns a 100% stake in Johor Port and 70% interest in Port of Tanjung Pelepas. Both ports are in Johor, within the Iskandar Development Region.
Che Khalib said Northport will add value to its port business and increase MMC's presence and network, especially in the central region of Peninsular Malaysia.
"With the addition of NCB into the group, now we control the southern part; the northern part as well, through a shareholder, in Penang Port. We should be able to do a lot of synergy," he said, adding it will also look at rationalisation in terms of marketing and customer service.
Asked whether there will be any job cuts, he said it is "too early to say".
Che Khalib said one of the challenges faced by Northport is the draft, which is not deep enough to cater to the latest kind of shipping requirements. "It is an issue that we need to quickly tackle ... to deepen the channel," he said.
Commenting on concerns over the impact of the NCB acquisition on its gearing ratio, he said: "We are buying a cash-generating asset already. Based on our assessment, we should be able to cover the interest and all that. Of course, we have our long-term plan for all our port groups."
On the group's outlook for 2016, Che Khalib said it "should be good", with the listing of its power unit, Malakoff Corp Bhd earlier this year. "We now don't have to consolidate the borrowings of Malakoff. That reduces our gearing."