This article first appeared in The Edge Financial Daily on October 11, 2019
KUALA LUMPUR: Businessman Pengeran Datuk Awang Daud Pengeran Awang Putera has emerged as a major shareholder of loss-making Miri-based offshore support vessel player Sealink International Bhd.
According to Bloomberg data, a total of 150 million Sealink shares were traded off-market 20 minutes before the market closed yesterday, via three direct trades of 49 million, 53 million and 48 million shares.
The 150 million shares, which amount to 30% of the company, were transacted at 36.5 sen apiece, 18.89% below Sealink’s closing price of 45 sen.
The parties involved in the transactions were not disclosed, but sources familiar with the matter told The Edge Financial Daily that Awang Daud, co-founder and deputy managing director of energy services group Serba Dinamik Holdings Bhd, was understood to be taking up as much as a 30% stake in Sealink.
Since closing at 13 sen on May 27, Sealink shares have surged by 246% over four months to end at 45 sen yesterday. Its market capitalisation has grown to RM225 million.
Sealink builds, owns and operates a diverse fleet of offshore marine support vessels, and has been loss-making for the past four financial years, coinciding with the beginning of the low crude oil price environment.
Currently, its shipping division has a fleet of 33 vessels. Since 1999, its shipyard in Kuala Baram, Miri has built 68 vessels.
For its financial year ended Dec 31, 2018 (FY18), Sealink recorded a narrower net loss of RM16.88 million as revenue slipped 7.2% year-on-year to RM69.79 million.
About 64.1% of its revenue in FY18 came from vessel charters, with the rest from shipbuilding activities, compared to FY14 when 94.8% of turnover was from vessel charters.
As at Dec 31, 2018, Sealink’s audited borrowings totalled RM143.41 million versus RM28.78 million in available cash. It also had RM46.68 million in short-term payable liabilities and its total current liabilities amounted to RM134.69 million against RM102.07 million in current assets.
That said, Sealink generated RM23.39 million cash from operations in FY18 after burning through its cash pile for the preceding three financial years, based on data tracked by Bloomberg.
Awang Daud’s entry may be an indication that the Yong family, which started the business, could be calling it a day. According to Sealink’s 2018 annual report released in April, the Yong family controls a total of 65.29% of the company between them.
As at April 1, 2019, there were no other substantial shareholders apart from members of the Yong family.
Most of their 65.29% stake is parked under their family vehicle Sealink Holdings Sdn Bhd, which is the single largest shareholder of the listed company with 51.82%. Current managing director, Yong Kiam Sam, holds a direct stake of 13.48% while his father, Foh Choi, owns 9.14% directly.
Kiam Sam took over as managing director in May 2018 following the retirement of his father Foh Choi, who founded the company in 1974 as a vessel charter business to non-oil and gas industries.
Sealink ventured into chartering vessels to oil and gas players in 1994, three years before it started its shipbuilding division. The company made its debut on Bursa Malaysia on July 29, 2008.
As for Awang Daud, surfacing in Sealink would mark his first public appearance in another Malaysian public-listed company after Serba Dinamik.
At present, Awang Daud has approximately 142.01 million shares or 9.67% of Serba Dinamik, which was listed in February 2017. At the point of listing, he held 13.21%. From mid-August this year to yesterday, he sold a net 11 million Serba Dinamik shares.
Last Friday, Serba Dinamik announced that Awang Daud had been redesignated from deputy managing director and non-independent director to non-independent and non-executive director. The group said in a statement that this was to enable him to pursue other personal interests.
Interestingly, another Serba Dinamik co-founder — group managing director Datuk Dr Mohd Abdul Karim Abdullah — has also been busy on the acquisition trail lately.
In May this year, Mohd Abdul Karim surfaced in precast concrete manufacturer Sarawak Consolidated Industries Bhd (SCIB) with a 22.53% stake. He later acquired another 20.31% in August and launched a mandatory general offer at RM1.10 per share, valuing SCIB at RM94.47 million.
Separately, Mohd Abdul Karim also surfaced in textile manufacturer Kumpulan Powernet Bhd in June with a 20.04% stake. He joined the board as deputy chairman on July 1.
Sealink rose 0.5 sen or 1.12% to close at 45 sen yesterday, with a market capitalisation of RM225 million.