KUALA LUMPUR: Ailing shipping company Gagasan Carriers Sdn Bhd, an outfit in which Koperasi Permodalan Felda Malaysia Bhd and Cahya Mata Sarawak Bhd have substantial stakes, seems to have hit choppy waters.
On Aug 6, one of the company’s vessels, MT Imbak, failed to attract buyers for the second time in an auction put up because Gagasan Carriers failed to pay creditors.
To recap, MT Imbak was reportedly arrested since March, after it failed to pay Singapore-based bunker supplier Sky Oil & Gas Asia Pte Ltd monies totalling S$44,747 (RM129,434). Shortly after, other creditors also joined the bandwagon and placed claims against MV Imbak.
According to shipping publication Tradewinds, the arrested MT Imbak — a 10,800-tonne chemical tanker — received no bids close to its appraised value, with an official at the Sheriff of Singapore’s office saying that the three bids received “were pretty bad”, much like an earlier auction in July.
As such, a third auction for MT Imbak is likely to be conducted soon.
With shipping rates going through a weak patch, it is understandable why the seven-year-old MT Imbak is not attracting much interest. The Baltic Clean Tanker Index, which tracks the cost of carriage of refined products and chemicals, has fallen some 18% to just below the 700-point level from a one-year high of 848 points in mid-July.
However, the current levels are depressed compared with the go-go years in 2008, when the Baltic Clean Tanker Index was above the 1,500-point mark.
It is also noteworthy that MT Imbak was delivered in early April 2008, just before the stellar run on the index.
Other than MT Imbak, two other tankers belonging to Gagasan Carriers are also under arrest but in Malaysian waters, where banks are seeking to arrange for a sale, after defaults by the company. News reports also stated that another tanker, Gagasan Selangor, was arrested in Bangladesh in July 2014.
Based on information from its website, Gagasan Carriers has seven vessels, and with possibly four of the ships arrested, earnings are likely to be bad.
For the financial year ended December 2012, Gagasan Carriers suffered a net loss of RM8.3 million on a revenue of RM131.6 million.
To put things into perspective, Gagasan Carriers has been looking to exit the tanker market and venture into the offshore support services market. According to its website, the company has eight offshore support vessels — all fast crew boats and utility vessels.
Considering the faltering price of oil and rising competition in the offshore support services segment, it is unlikely that Gagasan Carriers is going to turn around anytime soon.
Gagasan Carriers is 48.1% controlled by Cope-KPF Opportunities 1 Sdn Bhd. Its other shareholders include its managing director Captain Johari Mohd Noh with a 20.7% stake, while its chairman Datuk Rosli Ibrahim and Datuk Rosman Hasan hold 15.6% each.
Cope-KPF, meanwhile, is 73.2% controlled by Koperasi Permodalan Felda and 26.5% by Cahya Mata, along with three other parties — CMS Opus Private Equity Sdn Bhd, Azan Azman and Syed Hizam Syed Mahmood Ezzularab Abdul-Moez Alsagoeff, who hold negligible stakes.
Thus, Koperasi Permodalan Felda has an effective 35.2% stake in Gagasan Carriers, while Cahya Mata has an effective 12.7% stake.
Today, Koperasi Permodalan Felda owns 5.8% of Felda Global Ventures Holdings Bhd (FGV) shares, and is no longer the plantation giant it used to be. This transformation happened in 2013, when FGV forked out RM2.2 billion to buy Koperasi Permodalan Felda’s 51% stake in Felda Holdings Bhd.
This enabled FGV to wholly own Felda Holdings, leaving Koperasi Permodalan Felda with cash.
While some may argue that it could be due to this sale of plantation assets that Gagasan Carriers is not doing well, FGV’s subsidiary Sutrajaya Shipping Sdn Bhd is also a dormant company now after much promise and chest thumping some 15 years ago.
Sutrajaya’s three vessels were sold in 2006, and ceased operations after racking up losses.
This article first appeared in digitaledge Daily, on August 17, 2015.