THE BUZZ
Perdana Petroleum announced on Bursa Malaysia yesterday that it has successfully divested its 26.9% stake in Petra Energy to Wah Seong Corp in accordance with the terms and conditions of a share sale agreement.
OUR TAKE
Divestment finally complete. With the completion of the acquisition, Perdana Petroleum is no longer a substantial shareholder of Petra Energy Bhd (BUY FV RM1.94) with immediate effect. After the 26.9% stake sale, Petra Energy will become a competitor of Perdana Petroleum. The stake disposal aside, we maintain our view that Perdana Petroleum will still return to the black in FY12 in view of a better 2H12 for the oil and gas industry as a whole.
Trimming FY12 and FY13 earnings estimate. The completion of the divestment means that Perdana Petroleum will no longer be able to recognize income from Petra Energy. Hence we are trimming our FY12 and FY13 earnings estimates by 4.0% and 9.8% respectively on account of the lower contribution from an associate company.
Acquires two new vessels. The company also announced yesterday that it had entered into a memorandum of agreement with Nam Cheong International Ltd on 30 Aug 2012 to acquire two 100-metre accommodation/work vessels (hull numbers SK308 and SK309) for a purchase consideration of USD29.5m each, for a total of sum of USD59m. We understand that the vessels are expected to be delivered in 2Q13. We believe that the acquisition is timely to cater for the expected increase in demand for the company’s services as oil & gas activities pick up in 2H12. We also expect more new projects from Dayang when the latter secures more brownfield services tenders later this year.
Maintain BUY. We are maintaining our BUY recommendation on Perdana Petroleum, with a revised fair value of RM1.17 (previously RM1.30), based on the existing PE of 12x FY13 EPS. Note that our fair value is derived from the company’s enlarged share capital of 556.4m shares, assuming full conversion of its existing warrants.
Source: OSK
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