KUALA LUMPUR: Earlier this month, when MMC Corp Bhd announced that it was buying the remaining 51% of Penang Port Sdn Bhd it does not own for RM220 million from parent Seaport Terminal (Johore) Sdn Bhd, talk of an impending initial public offering — that of MMC’s port and logistics arm — resurfaced.
It has got the investing fraternity wondering whether the IPO will take the shine off Westports Holdings Bhd, a container terminal operator with a market capitalisation of about RM14 billion.
The listing of MMC ports is likely to take place next year, the group’s managing director, Datuk Seri Che Khalib Mohamad Noh, told in an interview in February.
It is estimated that the IPO will raise as much as US$700 million, or RM3.08 billion, as reported by The Wall Street Journal, and could be among the largest in the region.
The analysts and market watchers The Edge spoke to do not seem to think the new listing will outshine Westports. And judging by the financials of Westports and MMC’s port unit, their estimates hold water.
Ports in MMC’s stable include the Port of Tanjung Pelepas Sdn Bhd (PTP) in Johor, Johor Port Bhd, Penang Port Sdn Bhd — the country’s northernmost container handling facility — and NCB Holdings Bhd, which controls Northport Bhd and Kontena Nasional Bhd.
MMC owns 70% of PTP while the remaining 30% is controlled by APM Terminals.
Westports operates a single terminal in Port Klang.
Other than his flagship MMC, Syed Mokhtar also controls 55.92% of diversified DRB-Hicom Bhd through private vehicle Etika Strategi Sdn Bhd.
For its nine months ended Dec 31, 2016, DRB-Hicom suffered a net loss of RM125.95 million from RM8.58 billion in revenue. Among its assets are Proton Holdings Bhd, the ailing carmaker, which is likely to be hived off soon.
So, it would seem that much of the appeal of MMC’s port business lies in the third port in Port Klang, to be built on Carey Island.
Earlier this month, MMC Port Holdings Sdn Bhd, Sime Darby Property Bhd and Adani Ports and Special Economic Zone Ltd, signed a memorandum of understanding to study the feasibility of developing an integrated maritime city on Carey Island.
MMC Port Holdings and Adani Ports signed a separate MoU to explore the feasibility of the Carey Island Port Project as an extension of Port Klang.
Then again, this is only an MoU, and is only likely to impact MMC’s port division’s bottom line the long term.
