KSTB eyes new business in oil and gas

PETALING JAYA: Kejuruteraan Samudra Timur Bhd (KSTB), which has to submitted its regularisation plan to Bursa Malaysia Securities Bhd before the April 2 deadline this year, is currently looking to acquire new business or assets in the oil and gas industry, benefiting from the current downtrend in global crude oil prices.
"We got the timing right this time. If there is any cheap or distressed asset (in the oil and gas industry), where the current shareholders could not sustain and where we have expertise in it, definitely we want to go in," its executive director, Darmendran Kunaretnam told a press conference after the company's AGM here yesterday.
"We are following the price of oil very closely. We want very much to try to stick to oil and gas," he added.
Darmendran revealed that the parties that KSTB is in talks with are local companies, but for now it is not committed to conclude any acquisition deals, as it looks for a fair deal.
"Nothing has firmed up yet, we are still in discussions and it is still very much at a preliminary stage," Darmendran said , noting the company has been looking for potential candidates for 16 months.
On April 3, 2014, the company disposed its tubular handling services business, named Samudra Oil Services Sdn Bhd that used to contribute more than 70% of its revenue. The disposal contributed to it being categorised as a Practice Note 17 (PN17) company.
KSTB also has disposed its land rig fleet and related equipment business to exit the loss making land rig services, which reduced its operations to a single tubular inspection and maintenance services business.
Darmendran said that the RM80 million proceeds from the disposal of its profit making subsidiary Samudra Oil to Destini Bhd will primarily be utilized towards the new acquisition.
Previously KSTB said the disposal provides an opportunity for it to realise and unlock the value of its investment in Samudra Oil, while enabling the company to participate in the future prospects and financial performance of Destini Group.
KSTB posted a net profit of RM946,000 for its first quarter ended Sept 30, 2014, compared to RM2.32 million a year ago. Its revenue in the same period was RM2.47 million from RM2.44 million.