PLUS ... July 09

PLUS EXPRESSWAYS PAID FIRST PORTION OF 2009 COMPENSATION OF RM92M

The Government paid PLUS EXPRESSWAYS the first portion of 2009's compensation amounting to RM92m to PLUS EXPRESSWAYS for not allowing the scheduled increase in toll rates, said PLUS MD - NOORIZAH ABDUL HAMID.

COMPENSATION FOR 2009
She said the amount accounted for 50% of the estimated full-year compensation, based on PLUS' projected traffic volume. " .... The actual compensation for this year (2009) will be determined next year (2010). The Government will look at the actual traffic volume .... " she told reporters after the Company's AGM on Jun 4, 2009.

REVISED CONCESSION
According to a revised Concession Agreement in Jan 2002, PLUS is allowed to raise its toll rates by 10% once every three years. It last increased toll rates in 2005.

A scheduled increase was scheduled for Jan 2008 but the Government did not allow it due to high inflation then. In 2008, the Government paid RM185m in compensation to PLUS.

LOWER TRAFFIC THROUGHPUT FOR 2009
NOORIZAH said the current economic downturn had caused a decrease in traffic volume at some of its highways, and that 2009 would be a challenging year for the Company.

The Company experienced traffic growth of 3.2% for the Jan to Apr 2009, but the Company projected a full-year growth of merely 1% to 2%, NOORIZAH said. This was in contrast to the 5.2% and 7.7% growth registered in 2008 and 2007, respectively.

" .... Our first quarter and fourth quarter are traditionally strong. But we can't sustain the 3.2% growth (in the first four months) due to economic downturn and rising oil prices ...." she said.

DIVIDEND COMMITMENT
However, the Company is committed to paying dividend of at least 16 sen per share in 2009 to shareholders, she added.

Voir Holdings Bhd ... July 09

The company planned to expand on its diversification into the food and beverage sector by opening two more "Garden Lifestyle Store and Cafe" outlets, which are annexed to Voir stores, by year-end.

They will spend between RM1.6 million and RM2 million on both cafes, depending on its size.

While its core business remains in fashion retailing, they are offering lifestyle choices to its customers.

Voir would also continue to explore new product lines, including expanding the sub-labels under existing brands. "Currently, Voir has 17 brands and sub-labels including the Garden Cafe," he said.

Voir's revenue fell 4.76% to RM35 million in its first quarter ended March 31, 2009 from RM36.75 million a year earlier due to the economic slowdown, while its net profit fell 72% to RM719,000 from RM2.67 million due to lower sales and higher c
cost.

Technical Support ...3

Technical Support ...2

YTL Corp Bhd/Starhill Global REIT ... July 09

YTL Corp Bhd will take up 75% of the total rights units to be issued by Starhill Global Real Estate Investment Trust (REIT) under its proposed one-for-one basis. The rights issue would be at 35 Singapore cents be unit.

As at June 22 2009, it owned 26.6% of Starhill Global REIT.

Starhill Global REIT is an externally managed real estate investment trust established in Singapore as a collective investment scheme. It was listed on the Main Board of the SGX-ST on Sept 20, 2005. As at June 18 2009, Starhill Global REIT has a total of 963.72 million units in issue.

Its core activities relate to the investment in a diverse portfolio of real estate and real estate assets with the prime objective of delivering regular and stable distributions and to achieve long term growth in the net asset value per unit.

YTL Corp had entered into a sub-underwriting agreement with DBS Bank Ltd (DBS), Merrill Lynch (Singapore) Pte Ltd and Credit Suisse (Singapore) Ltd in relation to the issue of 963.72 million new units in Starhill Global REIT.

The subscription was is in line with YTL Corp’s commitment to support Starhill Global REIT by facilitating the underwriting of the rights issue by the joint lead managers and underwriters.

The rights issue would also provide YTL Corp the opportunity to acquire rights units at a discount of approximately 45.3% to the closing market price on June 19, 2009 of 64 cents per unit.

Going forward …

Its official quoted that the rights issue will help strengthen its balance sheet and help them improve financial flexibility. It is part of Starhill Global REIT’s long term proactive capital management strategy. To be sure, to remain conservatively geared as asset prices deflate, REIT’s like Starthill Global are under pressure to boost their equity capital base. And the rebound in the stock market makes this a good time to launch its one for one offer of 960 million new shares at 35 sen each to raise S$337.3 million. But the cash Starhill global REIT is raising will come in handy for another reason.

The REIT owns stakes in Ngee Ann City and Wisma Atria, two of the most prominent properties along Orchard Road, located right next to the much awaited ION Orchard that is due to open on July 21, 2009. An asset enhancement programme is being planned to capitalize on the anticipated upturn in traffic the new mall is likely to attract.

Starhill global says 90% to 100% of the rights proceeds will be used for repayment of debt, acquisition opportunities and asset enhancement initiatives.

The asset enhancement plan for the two malls could potentially add as much as 100,000 sq ft gross floor area, but REIT is more likely to expand the properties by some 40,000 sq ft. They are also thinking of enhancing its façade with more pop up retail space to have the longest linear Orchard Road frontage, so Wisma will be more attractive.

But it could be several months before the REIT gets approval from the co-owners of the two properties for the expansion plans. Starhill Global owns 27% of Ngee Ann City and 74% of Wisma Atria.

The iconic status of the two properties and the 357m of street level frontage along Orchard Road they offer were cited as the key reasons for YTL Corp acquiring control of the REIT.

Besides its stake in Ngee Ann City and Wisma Atri, Starhill global owns seven commercial properties in Tokyo, Japan and a shopping mall in China. The REIt is targeting to grow its portfolio of properties to S$3 billion with in three years.

REIT is scouring around for opportunities to invest in distressed assets in Singapore, Malaysia, China, Japan and Australia.


The rights issue announced could be the portent of an acquisition spree. After the rights issue, Starhill Global’s debt to asset gearing will fall to 20.7% It currently has some S$670 million in debt as at March 31, 2009, of which S$380 million are commercial mortgage backed securities.

Its cost of debt is currently 2.95%.

YTL has given an undertaking to subscribe to its entitlement of 26.6% and an additional 48.4% or a total of 75% of the rights offering. If YTL subscribes for its entire undertaking, it would end up owning as much as 50.8% of the REIT. YTL is seeking a whitewash waiver not to make an offer for the company from shareholders.

Related:-
YTL ... Jan 2009
YTL Corp Bhd ... Nov 2008

Muhibbah Engineering Bhd ... July 09

Muhibbah Engineering Bhd is bidding for about RM3 billion in project, both locally and overseas, as it seeks to bolster its current book order of RM4 billion.

The RM3 billion projects it was eyeing were in the construction sector. It’s a mix of both local and overseas jobs. The success rate hinged on the timing and whether the project was compatible with the company expertise.

On the current order book of RM4 billion, it comprised of construction, shipyard and cranes projects for local and international markets. Of the RM4 billion, the construction order book was about RM2.6 billion and the remaining comprised of shipyard and cranes at RM820 million and RM620 million respectively.

Of Muhibbah’s income of RM381.19 million for the first quarter ended March 31, 2009, 55% was earned locally and the rest from overseas projects. Prior to the economic crisis, its order book was 60% foreign and 40% local. The percentage of jobs was around 40% from local companies and 60% international.

DRB Hicom Bhd/MMCCorp ... July 09

Sources say it has submitted a proposal to construct a double track railway line from Gemas to Johor Baru spanning 250 km.

This proposal, which could be valued at as much as Rm8 billion, will rival a bid by privately held Global Rail Sdn Bhd that is teaming up with the Chinese consortium China Infraglobe Consortium. Global Rail and its Chinese partners were reported to have submitted a proposal early June 2009 to the finance and transport ministries.

While details were scarce at press time, it is understood that DRB Hicom would end up working with sister company, MMCCorp, as the cargo carried on the railway track would ultimately pass through the PTP.

DRB Hicom is a 55.9% controlled by tycoon Tan Sri Syed Mokhtar also has 51.8% stake in MMC Corp, his flagship vehicle, which owns 70% of PTP.

The proposed Gemas-JB line is to link up with the Seremban to Gemas stretch that is currently being built by Indian based ircon Intl Ltd. There is a possibility that the rail line may even extend Gemas and Johor Baru.

The project would include the building of stations, depots, yards, bridges and the electrification, signaling and communications systems, among others.

A source say the double track railway will bypass KL to avoid congestion in the city, where priority is given to passengers trains.

Global Rail’s largest shareholder is Zulkifli Md Hussain, who owns 51% of Global Rail. Fan Boon Heng and another director, Hau Choo Kiat, have about 30% and 20% equity interest respectively in the company.

While Global Rail and its partner have grand plans, DRB-Hicom’s controlling shareholder Syed Mokhtar is known for his links to UMNO.

MMC and its JV partner, Gamuda had secured the Rm12.5 billion northern portion of the double track project. However, if DRB Hicom secures the southern portion of the project, eyebrows would be raised because ot its track record with rail jobs. To recap, in 2005 the government had terminated a contract with the company to take over the Rm4.6 billion Rawang to Ipoh portion of the double tracking project that had been awarded to it in July 2000. The reason was that the 182 km track was 17 months behind schedule and had exceeded the budget.

For 4Q2009 ended March, DRB-Hicom suffered a net loss of Rm60.7 million on the back of RM1.5 billion in revenue.

Related:-
DRB-Hicom Bhd/EON ... Nov 2008

GENTING ... Jun 09

GENTING NET PROFIT DECLINES 51% FOR 1QE MAR 2009

GENTING reported a 51.5% decline in Net Profit to RM213.1m for 1QE Mar 31, 2009 from RM439.4m a year ago. Earnings were impacted by Impairment Loss from STAR CRUISES ltd and weaker plantations performance.

In the Company's results announcements on May 28, 2009, the Company expressed concerns about the remaining period of this year as its prospects may be impacted by the uncertainty from the pace of global economic recovery. Concerns about the spread of the Influenza A (H1N1) virus (Swine Flu) might also affect consumers' sentiments and visitations to Genting Highlands Resort, it added.

For 1QE Mar 2009, GENTING's Revenue declined 4% to RM2.07 bil compared with RM2.16 bil. EPS fell to 5.77 sen from 11.87 sen.

LEISURE DIVISION RECORDS LOWER REVENUE
The Group's eisure and hospitality division recorded marginally lower revenue for 1QE Mar 2009, despite better performance from the Malaysian-based operations. Genting Highlands Resort posted higher revenue and profit due to increased volume of business. This increase was offset by the lower revenue from the UK casino operations due to the weaker UK economy.

POWER DIVISION
The power division saw its revenue rising mainly from the Kuala Langat power plant, which benefited from higher energy charges. This was offset by higher operating cost of its China-based Meizhou Wan plant, arising from higher coal prices.

PLANTATION DIVISION
The plantation division was affected by lower palm products prices and a decrease in fresh fruit bunches production.

PROPERTY DIVISION
The Property Division was impacted by the softer property market conditions.

OIL & GAS DIVISION
The Oil & Gas Division was affected by lower average prices, resulting in lower revenue and profit.

IMPAIRMENT LOSS TO INVESTMENTS
" .... The Group was also impacted by an impairment loss of RM30.4m in respect to the Group's investment in STAR CRUISES ltd, no one-off gains and lower share of profit from jointly controlled entities and associates in 1QE Dec 2009 ...." it added.