KUALA LUMPUR: Ramunia Holdings Bhd has been attracting heavy interest of late as it gets back on its feet and gears up to take advantage of the bullish outlook in the oil and gas (O&G) industry.

The counter closed at 67 sen last Friday. Ramunia’s share price has risen close to 50% year-to-date and heavy trading volume in recent months marked the return of investor interest to the O&G player which was earlier shunned because of its heavy debt.

Following the sale of its core asset, Teluk Ramunia yard, to Sime Darby Bhd for RM515 million cash, Ramunia was able to pare down its debt and it is now looking to get back into the game.

After its AGM last Friday, Ramunia CEO Nor Badli Mohd Alias told the press that it was eyeing RM300 million worth of fabrication jobs this year as projects up for grabs started pouring into the market again, underpinned by the surge in crude oil prices.

He said that for 2011 alone, Petroliam Nasional Bhd (Petronas) and production sharing contracts (PSC) would give out over 200,000 tonnes of steelwork contracts. Badli noted that the existing capacity of fabricators was only 160,000 to 180,000 tonnes. Given that Ramunia is one of the six licensed fabricators for Petronas, it expects to get a fair share of the contracts to be dished out.

“The focus for the group this year is to build our order book. In the past, we had an order book of RM700 million at the peak. Hopefully, we will be able to secure this RM300 million worth of jobs,” Badli told The Edge Financial Daily. Currently, its order book is somewhat negligible.

Ramunia has positioned itself over the past year to participate in various O&G jobs.

In January last year, Ramunia signed a deal with Pleasant Engineering Sdn Bhd, a wholly owned subsidiary of Coastal Contracts Bhd, to utilise the latter’s yard in Sandakan. It also recently proposed to acquire the Pulau Indah integrated fabrication yard from Oilfab Sdn Bhd, a 51%-owned unit of delisted Oilcorp Bhd, which is located in Klang.

“Our fabrication yards have a capacity of about 15,000 tonnes and can take on business worth RM300 million,” Badli said, adding that Ramunia’s existing order book was negligible.

It is also in preliminary discussions to acquire an equity stake in Syarikat Borcos Shipping Sdn Bhd. Lembaga Tabung Haji (LTH) is presently the largest shareholder of Borcos Shipping, holding a 84% stake, while other shareholders are AWH Equity Holdings Sdn Bhd with 9% equity interest, Dayang Enterprise Holdings Bhd with 6% and Vida Partners Sdn Bhd, 0.8%.

LTH is also Ramunia’s largest shareholder with a 25.17% stake.

Badli said there would be opportunities for acquisitions within the LTH group but stated that there was nothing on the plate for the moment. “But we are looking at assets (for acquisition),” he added.

For FY10 ended Oct 31, Ramunia’s cash and cash equivalents stood at RM131.55 million with no borrowings compared with the long-term debt of RM346.78 million a year ago.

It turned around in FY10 with a net profit of RM65.79 million against a net loss of RM52.72 million in FY09.

Moving forward, the group expects fabrication to still be the key growth driver. Badli said fabrication would contribute 70% to group revenue for FY11 while the remaining 30% would come from its other businesses such as hook-up and commissioning as well as crane manufacturing.

Badli said Ramunia had written to Petronas to express its interest to participate in marginal field projects. Under the Economic Transformation Programme, Petronas will open more marginal oilfields and it recently awarded a few with more in the pipeline.

On the group’s PN17 status, chairman Datuk Azizan Abdul Rahman said it plans to apply for a six-month extension this week to prepare it regularisation plan.

“We will try to get the upliftment as soon as possible, hopefully within the next three months but we have to ask for an extension to submit our regularisation plan first,” he said.

An industry observer said Ramunia had its advantages which would enable it to turn around easily once it had cleared its debts.

“It is very much still an empty shell at the moment. But it should be fairly easy for the group to deliver as it has the fabrication licence with Petronas and O&G projects are coming out. It only depends on who manages the company,” said the observer.

This article appeared in The Edge Financial Daily, February 21, 2011.