Business

Saturday May 12, 2007

Kuok’s next move on Transmile awaited

By KATHY FONG



PETALING JAYA: The market is abuzz with talk on what Tan Sri Robert Kuok’s next move will be in Transmile Group Bhd, whose share price slid to a multi-year low of RM8.35 yesterday.

There is speculation that Kuok will be taking advantage of the current share price weakness to raise his stake in Transmile.

According to Bursa Malaysia, the Kuok group held a 17.3% stake in Transmile as at January. Kuok bought into the chartered freight service provider in March 2004 at RM6.25 per share.

Transmile on Monday told Bursa Malaysia that its auditor, Deloitte & Touche, had not been able to obtain supporting documentation from the management on certain transactions. As a result, the group failed to issue its audited annual accounts.

In view of that, Transmile’s board hired Moores Rowland Risk Management Sdn Bhd to conduct a special audit on the group’s annual accounts.

Whether Kuok was accumulating more shares in Transmile, it would be known sooner or later. Sources pointed out that he had no immediate intention to do so for now. But it is rather certain the tycoon will at least retain his stake in Transmile, if not raise it.

“I don’t think Kuok would walk out from Transmile, given whatever has happened.

“Transmile fits well in his logistics business,” said an industry observer.

The Kuok group has large business interests in logistics globally.

Kerry Logistics, a unit of Hong Kong-listed Kerry Properties Ltd, is Kuok’s flagship company in logistics. It is indeed a logistics giant in mainland China.

The logistics business generated HK$1.17bil profit on a turnover of HK$6.3bil last year.

Kerry Logistics operates a portfolio of warehouses, logistics centres and port facilities, measuring more than 16 million sq ft. It is backed by a truck fleet of over 3,000 vehicles, with operations in more than 150 cities across 18 countries.

There are synergies between Transmile and the logistics business of the Kuok group which has strong connections in China and Hong Kong, analysts said.

Transmile has landing rights in more than 10 major cities in Asia-Pacific, including Sydney and Auckland, plus cities in the US and Europe. It also has two fifth freedom rights (FRR) in Hong Kong and four cities in China.

With the FRR, the group’s aircraft can carry cargo from Subang to Hong Kong or one of the Chinese cities and continue to North America, and vice-versa.

Analysts said Transmile’s landing rights and FRR were actually assets for the Kuok group’s logistics business.


TRANMIL : [Stock Watch] [News]

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