This article first appeared in The Edge Financial Daily, on May 12, 2016.

KUALA LUMPUR: TSR Capital Bhd, a construction and civil engineering outfit, is diversifying into the oil and gas (O&G) industry.

In a bourse filing yesterday, TSR Capital said it had entered into a memorandum of agreement (MoA) with two individuals, Mohamad Othman and Datuk Seri Dr Prushotman Ragawan, to set up a special purpose vehicle (SPV) for the O&G venture.

“The MoA is consistent with its corporate objective of profit maximisation, increasing shareholders’ value and improving business sustainability,” said TSR Capital in the announcement.

Mohamad Othman is the shareholder of Newwin Engineering (M) Sdn Bhd, a bumiputera contractor that holds several licences issued by Petroliam Nasional Bhd (Petronas).

Newwin is capable and qualified to undertake plant maintenance and other works for oil majors like Petronas. It has been in business for 25 years.

Meanwhile, Prushotman is the shareholder of Dynamic Engineering & Plant Services Sdn Bhd, a specialist contractor capable and having the resources to carry out various plant maintenance and has been in business for eight years.

According to TSR Capital, an SPV will be set up for the venture. Eventually, the SPV will be listed on Bursa Malaysia.

“The parties are keen to merge their assets, resources and strength, through the mergers and acquisitions of Newwin and Dynamic, to expand their current O&G business and [to] inject those assets into the SPV, subject to the payment consideration and other terms and conditions to be agreed upon by the parties,” it added.

The MoA shall take effect from the date of the agreement and remain in force for a duration of six months, unless mutually extended or terminated, TSR Capital said.

TSR Capital’s share price dropped one sen to 57 sen yesterday, valuing it at RM99.44 million.