Transocean to buy container transportation firm for RM140m

PETALING JAYA: Transocean Holdings Bhd is buying a container transportation firm Taipanco Sdn Bhd for RM140 million.
Taipanco is involved in the container haulage business and its core business activity is container transportation, primarily servicing two major ports in the central region namely Northport and Westport.
Taipanco and its subsidiaries has a total fleet size of more than 200 prime movers with more than 700 units of trailers. For the financial year ended Dec 31, 2015, Taipanco contributed more than 50% to the revenue of its group of companies.
Transocean and its subsidiaries is primarily involved in the provision of logistics solutions, manufacturing and trading of tyres, and investment holding activities. The group's logistics segment contributed more than 60% to its total revenue for FY15.
The group's financial performance has been deteriorating over the past four years, recording a revenue of RM25.59 million in FY15 and a profit after tax of RM90,000 in FY15.
"The proposed acquisition will enable Transocean to revitalise its business and improve its lacklustre financial performance. Given Taipanco's strong profit track record and taking into consideration the Profit Guarantee provided by the vendors, Taipanco is expected to generate a steady source of income and cash flow to the group. The exercise represents an opportunity for Transocean to broaden its income base thereby improving the group's weakening financial performance. An overall better performance would instil stronger confidence amongst its shareholders," Transocean said.
The profit guarantee covers a cumulative pretax profit of not less than RM33 million from Taipanco for FY17, FY18 and FY19 and a pretax profit of not less than RM10 million for each financial year.