Monday 07 Oct 2024
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This article first appeared in The Edge Financial Daily on February 10, 2020 - February 16, 2020

KUALA LUMPUR: Energy services group Serba Dinamik Holdings Bhd is in talks to take over Sarawak state-owned integrated engineering firm Brooke Dockyard and Engineering Works Corp, sources said.

The group is currently in early state of negotiations with the state government on the acquisition, according one of the sources that are familiar with the matter.

“The value of the acquisition has yet to be determined, as both parties are exploring all possibilities,” the source added.

A source said Brooke Dockyard had slipped into financial trouble after it incurred RM100 million of losses caused by a contract it has undertaken.

It is no longer economically viable for the state government to hold onto the asset, the source noted.

Serba Dinamik could not be reached for comment on the matter.

Based in Sarawak, Brooke Dockyard is involved in the oil and gas (O&G) services sector, including maintenance, repair and overhaul (MRO) — in which Serba Dinamik has a presence.

TA Securities in its research note said that Serba Dinamik is poised to receive new MRO orders estimated to be about RM1 billion from Sarawak this year.

The company’s newly completed RM259 million facility in Tanjung Kidurong, Bintulu — the Bintulu Integrated Energy Hub (BIEH) — is expected to enable Serba Dinamik to have a slice of the action in the state. The facility is expected to be launched in the first quarter of this year.

The BIEH is a 30-acre (12.14ha) development in Tanjung Kidurong which will house the MRO and IRM Centre of Excellence in Sarawak. The BIEH is targeted to become a central facility that will provide a multitude of MRO, engineering, procurement, construction and commissioning  (EPCC) and relevant scopes of work.

The centre will host MRO workshops, blasting, coating and galvanisation areas and plants, fabrication and laydown areas, warehouses and storage facilities, and other facilities such as office buildings, car parks, power substation, a waste water treatment facility and training centres.

Serba Dinamik has set a target of securing an additional RM5 billion of new job orders in 2020, on top of its existing order book of some RM10 billion.

Its managing director and chief executive officer Datuk Dr Mohd Abdul Karim Abdullah was quoted by the media earlier as saying that the target was achievable based on the company’s current order book and an anticipation of improvement of the US-China geopolitical situation.

Last Tuesday, Serba Dinamik announced that three of its subsidiaries secured 12 new contracts — half of which are worth a combined US$78 million (approximately RM322.92 million), while the other half are on call-out basis.

Separately, The Edge Malaysia weekly reported that its deputy group managing director Datuk Awang Daud Awang Putera was in talks to acquire a controlling stake in a privately held O&G outfit, Transfame Sdn Bhd.

The weekly quoted industry sources saying that the negotiations had reached an advanced stage, although there was no indication on what price Awang Daud will pay for the O&G company.

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