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Transocean to meet RM40mil capital requirement

Tuesday August 7, 2007

By SHARIDAN MOHD ALI

PETALING JAYA: Transocean Holdings Bhd, a Penang-based logistics company, will comply with Bursa Malaysia’s requirement to increase its minimum issued and paid-up share capital requirement to RM40mil to remain listed.
Bursa decided to grant an extension to Transocean until Aug 18 to submit a proposal to comply with its listing requirements.

Financial director Chong See Teck said the company was trying its best to submit the proposals to the relevant authorities before the deadline.
He told StarBiz that Bursa had granted the extension in view of the agreements signed with Kumpulan Kenderaan Malaysia Bhd (KKMB) and Usmeta Manufacturing Sdn Bhd, both wholly-owned companies of Nadicorp Holdings Sdn Bhd.

In the first agreement, Transocean agreed to sell 12 million of its shares at RM1 each to KKMB. This exercise, which will boost Transocean’s current paid-up capital of RM28.9mil to over RM40mil, is expected to be completed by year-end.

Chong See Teck“KKMB will have a 29% stake in Transocean and the proceeds will be utilised to acquire the total equity interest in Usmeta for RM8mil,” Chong said, referring to the purchase of Usmeta in the second agreement.

“The remaining RM4mil will be useful to enhance our tight cash flow and working capital.
“Going forward, the company is seeing ia reduction in its gearing,” he said, adding that as at March the group’s total borrowings stood at RM17mil. He also stressed that Transocean had been disposing of its non-income generating assets since 2003.

To date, the group has sold its land in Sungai Petani (Kedah), its land in Balik Pulau, old head office and a double-storey shop lot in Seberang Perai Tengah (all in Penang), and a double-storey shop lot in Pasir Gudang (Johor) for a total of RM6.2mil.
“We expect to see improvement in our financial performance by the end of our next financial year,” Chong said.

He said Usmeta, which manufactures and rethreads used tyres, would boost the group’s cost efficiency in tyre usage after the takeover.

Transocean, which has been in the red since 2002, was suspended from trading since Nov 28 last year due to its failure to comply with the minimum paid-up share capital requirement.

It posted a loss of RM3mil on revenue of RM43.8mil for the financial year ended May 31. In its third quarter ended Feb 28, it recorded a cumulative loss of RM1.1mil on revenue of RM32.2mil. But Chong was confident that with the improvement of its cash flow, the company would be able to focus on its core activity in providing bonded land transportation and haulage services between Penang and Singapore. Currently, these business segments contribute 70% to the group’s revenue.

“The recent liberalisation of haulage tariff and one-box rate for both 40-footer and 20-footer containers are improving our operational costs,” he said.