TAS Offshore to go into new businesses

Friday, July 31st, 2009

Export-oriented shipbuilder TAS Offshore Bhd plans to venture into new businesses following its listing on Bursa Malaysia’s Main Board.

Deputy managing director Simon Lau said the company planned to use part of the listing proceeds for working capital and venture into building, owning and selling ships, and chartering of ships.

“These new business activities will allow TAS Offshore to diversify its business to enhance its revenue stream,” he said after the launch of the company’s prospectus in conjunction with its initial public offering (IPO) by Deputy Chief Minister Tan Sri Dr George Chan in Kuching today.

The listing of the Sibu-based company will enable TAS Offshore, the holding company of Tuong Aik Shipyard Sdn Bhd, to raise proceeds totalling RM69.3 million for expansion of operations, working capital and listing expenses.

Lau said another part of the proceeds is for the acquisition of equipment and machinery such as gantry cranes and upgrading of the shipyard.
TAS Offshore, which is scheduled to be listed on August 28, 2009, will issue 77 million new shares under the IPO.

Of these, 3.5 million shares will be issued to eligible directors and employees, and persons who have contributed to the company’s success.

In addition, nine million shares will be issued to the public, 21.5 million shares for private placement to identified investors, and 43 million shares to Bumiputera investors approved by the International Trade and Industry Ministry.

OSK Investment Bank Bhd is the adviser, sole underwriter and sole placement agent for the IPO.

Lau said TAS Offshore has been serving international customers from various sectors, especially the oil and gas and mining industries, with close to 90 per cent of the business driven by exports with major customers from the United Arab Emirates, Bahrain, Indonesia and Singapore.

“Exports make up 89.1 per cent of the total group revenue,” he said.

Lau said TAS Offshore, specialising in the 23- to 60-metre tugboats, anchor-handling tug and tug supply vessels, barges, ferries and workboats, has built more than 150 vessels for the overseas and Malaysian markets.

Operating from Sungai Bidut in Sibu, TAS Offshore has the capacity to construct an average of 23 units of vessels per year based on an eight-hour shift, he said, adding that the yard was running at full capacity.

OSK Investment Bank’s director Joseph Soo said TAS Offshore has been growing at a compounded annual growth rate of 33 per cent per annum for the past three financial years.

For its 10-month financial results which ended March 31, 2009, the company recorded a revenue of about RM110 million with profit of RM15 million compared to the full-year revenue of RM121.3 million with profit at RM16 million for its last financial year ended May 31, 2008, Soo said.

“Based on the existing order books in hand, TAS Offshore has 28 ongoing contracts, including nine new contracts secured since June 1 last year, for its shipbuilding activities which shall keep the company occupied until 2011,” he said.

Source: Bernama