Wynton Private Equity Group

PP 13917/10/2012 (030948) www.focusmalaysia.my

WEEKLY ISSUE Slow and steady for Asean airline plan 038 insurer P&O ... page 16 scuttled ... page 14

BUSINESS ANALYSED Aug 24-30, 2013

Inside: 16 pages of YTL ripe for Focus Learning PENINSULAR MALAYSIA RM4.50 | SABAH & SARAWAK RM5.50 MALAYSIA re-rating ... page 18 supplement

Shares of KPJ attractive? Healthcare group’s price correction follows adverse court decision ... page 24 2014 looks murky for Top Glove Rubber glove maker has hands full with nitrile competition Wynton Private Equity Group .... page 22

Eversendai undervalued despite gains Jho Low Share price struggles despite strong financials and track record ... page 20

FocusView high flier  Leave MAS management How a 31-year old has alone linked up with top politicians,  Blacklist PTPTN royal families and Hollywood No sequence loan defaulters to success ... page 05 celebrities ... pages 10-12 Malaysian Genomics Wheat or Resource Centre’s Munirah Abdul Chaff Hamid has made  SapuraKencana some unorthodox to snap up Labuan decisions in her Shipyard stake? journey to becoming the co-founder of a  Mercedes to Bursa-listed genetic introduce its research company electric cars ... pages 04&05  Tok Bali port woos Petronas for anchor tenant Low Taek Jho, CEO, Jynwel Capital Ltd ... page 06 FocusM Aug 24-30, 2013 10 lead

THERE are very few 31-year-old tycoons in Malaysia. And fewer yet have direct access to top Just who is Jho Low? Malaysian politicians, royal families in the Middle East or Political heavyweights, royal families, even major celebrities in Hollywood. But that’s exactly what Low Taek major celebrities – it’s all in a day’s work for this tycoon Jho – better known as Jho Low – enjoys. His influence in oil-rich Gulf countries is such that he can persuade Interestingly, the Viceroy Group them to bring billions in investment is also part of the holdings of the to Malaysia. Often, his role is hidden. Mubadala Development Company He has been seen partying at based in Abu Dhabi, the United Arab exclusive clubs with the likes of Usher Emirates. and Paris Hilton, and was even said to The close connection between Low have brought Korean megastar Psy to and Mubadala is well demonstrated as Penang in May. he is also non-executive chairman for Penang-born by HAFIDZ Asia and a member of the advisory Low, son of Datuk BAHAROM board of EMI Music Publishing. Larry Low of MWE EMI is also the recording label for Holdings Bhd fame, Usher in the United States. has invested in multi- Low’s Jynwel and the Mubadala ple ventures including fund were part of the November property, being the link for 2011 takeover of EMI by Sony worth sovereign wealth funds out US$2.2 bil (see sidebar). of the Middle East and even The website adds a venture into marketing that he is also a director high-quality women’s lin- of Lilestone Ltd, a gerie. Today, his family is London-based company said to reside mainly in that owns Myla, a lingerie Singapore (see sidebar). boutique with nine branch- Many are curious es in the UK, Germany, about the source of the Ireland and France. Jynwel young tycoon’s wealth. completed the purchase of Unlike others, who have the brand on Aug 5, 2013. prominent corporate vehi- It is Low’s link to the cles or businesses, he has no Mubadala fund that places apparent flagship except Hong the spotlight on the dealings Kong-based company Jynwel Capital between Jho Low, representing Ltd, of which he is listed as CEO. the Mubadala Group, and Malaysia’s Critics say he is no more than a government-linked 1Malaysia Devel- well-connected middleman collecting opment Bhd (1MDB). fees for deals, while his friends defend him as one who brings much-needed 1MDB and the Middle East link investment to Malaysia. Through contacts made during his In an interview with a Malaysian schooling years overseas, Low is English-language daily, Low has styled believed to be the link for 1MDB’s himself as being at parties sponsored receipt of funds from Abu Dhabi-based by friends and not spending his Mubadala Development Corp. own money, which he said is Low had a role in setting up the instead spent on work. Terengganu Investment Authority However, he has mentioned hav- (TIA), the state’s sovereign fund man- ing set up the Wynton Private Equity ager and the forerunner of 1MDB. Group with some of his friends while “I was involved in the setting up of taking a semester off from his degree TIA from January 2009 to mid-May programme at the Wharton School, 2009. The Yang di-Pertuan Agong [Tu- the business school of the University anku Mizan Zainal Abidin] was kind of Pennsylvania in the US. enough to ask me to assist, given my While little is known of the Wynton relationship with the Middle East and Group as well as of Low himself, both insight I had on how they had set up were reported in October 2012 as their sovereign wealth funds,” he said. being parties interested in bidding for However, Low denied any involve- the world-famous Claridge’s, Berkeley ment in 1MDB itself, saying he had and Connaught hotels in London. not received any compensation In a court document filed in Ire- for his work with the compa- land, the approach by Low was shown ny. This is also the stance of to have been made in mid-December former 1MDB CEO Datuk 2010, followed by a revised letter of Shahrol Halmi. intent sent to shareholders on Jan 3, “The role of Jho Low as 2011 proposing an acquisition of all far as 1MDB is concerned shares on the basis of an enterprise is zero. I’ve heard talk that value of £1 bil, subject to due diligence he is advising the government on and the agreement of documentation Middle Eastern investors but it’s not including warranties and indemnities. true. What he does is help promote “An accompanying letter from a Malaysia to investors,” Shahrol has Malaysian bank indicated that it was admitted, in that interview with the Wynton Group, Low’s holdings under said. intended to seek to raise up to £950 local English-language daily, to having Jynwel Capital are transparent. Low is Malaysian-based 1MDB has seen million of debt and/or mezzanine fi- friends in Khazanah Nasional Bhd, the listed on Jynwel’s website as CEO of a rise in investment from Mubadala, nance and £50-£100 million of equity. Malaysian sovereign wealth fund. the company and also holds the post which includes US$4 bil to develop an A further letter of intent dated Jan 10, “I do from time to time speak to of director of the Viceroy Group of aluminium plant in Sarawak, a part of 2011 was sent to the shareholders,” it friends in Khazanah and 1MDB to get Hotels. the Sarawak Corridor of Renewable says. However, the name of the Malay- their input and ideas on how to better The San Francisco-based hotel Energy (SCORE) project. sian bank was not mentioned. facilitate investments from the Middle group also explains Jho Low’s close The Abu Dhabi-based group again The court filing adds that Low was East to Malaysia or vice versa,” he was connection to the Hilton family, invested in Sarawak in January 2010, said to have had the backing of a Ma- reported as having said. also hoteliers. He is said to be well when Mubadala Oil and Gas signed a laysian “sovereign wealth fund”, which While not much information acquainted with Paris Hilton, whose Development and Production-Sharing was not named. Interestingly, Low has has been made public regarding the family owns the Hilton Hotel chain. Agreement with Malaysia’s Petroliam Aug 24-30, 2013 FocusM lead 11

Nasional Bhd (Petronas) to operate the offshore-Sarawak Block SK320. The agreement details that the stakes would be divided 75% to 25% in favour Jho Low’s network of Mubadala. Jynwel Capital Ltd In May 2010, 1MDB in a joint Viceroy Hotel Group (CEO) venture with the Qatar Investment (Board Member) Authority was granted the rights by 50% Wynton Private Equity Group the federal government to develop (Founder) Bandar Malaysia, a multibillion-ring- Mubadala Development Co Lilestone Ltd git commercial development project. (Abu Dhabi) While QIA was reported to have (Director) invested some US$5 bil in the project, 49% sources within 1MDB were reported to Aldar Properties have wanted to bring in Mubadala. (Abu Dhabi) Autron Corp (Singapore) EMI Music Links with other companies Publishing Other than his Mubadala link, Low (Board Member) is linked to property development companies including Singapore-based PetroSaudi Int Ltd Autron Corp Ltd, Mubadala majori- Binari Bistari S/B ty-owned Aldar Properties PJSC and 100% Mudala Development Co. In August 2007, the three property Javace S/B 51% Swan Symphony S/B companies along with Low’s Wynton 100% Abu Dhabi-Kuwait- Group signed a memorandum of un- Malaysia Investment Corp derstanding for a “real estate project”. 51% No details were mentioned in the UBG Bhd MOU in a filing by Autron in Singapore 100% with the Singapore Exchange Securi- ties Trading Ltd. Loh & Loh Majestic Putrajaya However, Autron was reported as Corp Bhd Masterpiece S/B Perdana Bhd having purchased The Oval and The Avare near the KLCC, Kuala Lumpur in 2010. A recent online search shows Research by Dinesh Immanuel that The Oval itself has been acquired, financed and marketed by the Wynton Private Equity Group (M) Sdn Bhd, Companies linked to Jho Low Low’s earliest set-up during his college days. The Oval website shows that the BEFORE Jho Low started Jynwel Capital 2. Terengganu Investment 4. Jynwel Capital Ltd apartment building is being marketed in Hong Kong, the 31-year-old Malaysian Authority (now 1Malaysia by Titan Debut Sdn Bhd, a subsidiary started his career as a middleman of sorts. Development Bhd) JHO LOW is CEO of Jynwel Capital Ltd of the Hong Leong Group. However, Low reportedly started working with friends based in Hong Kong. His brother Szen Low is both phone numbers listed have been at university to start the Wynton Private WHILE Jho Low has denied his involvement Jynwel's managing director. disconnected. Equity Group, which had a base in Malaysia, in setting up 1MDB, he has admitted that Established in 2010, the company acts Also, in its half-year results in 2009, the British Virgin Islands and there is even a the Sultan of Terengganu and former Yang as middleman in negotiating partnerships Autron announced it had formed similar-named entity based in Beverly Hills, di-Pertuan Agung Sultan Mizan Zainal Abidin with significant investors such as leading a special investment vehicle with California. asked him for assistance in setting up the sovereign wealth funds, major international Low’s Wynton group to invest in the Below are some of the main companies Terengganu Investment Authority (TIA) to investment companies and large family Iskandar Development Region (IDR) with which he is closely associated. manage and invest the state's wealth. enterprises. in Johor. In September 2009, Prime Minister The company has also invested by being This tallies with his earlier state- Datuk Seri Najib Razak announced the state one of the partners with Sony Corp to ment about working with the govern- sovereign fund would be expanded to cater acquire EMI Music Publishing from Citigroup ment. to federal investments, rebranding it as in June 2012, to the tune of US$2.2 bil. “My first was actually the Iskandar 1MDB. Low was made non-executive chairman Development Region investment. A Low is said to have used his global of EMI in Asia and is also a member of the friend from Khazanah called me and network to link 1MDB to its Middle advisory board. mentioned that they were looking to Eastern partners, including the Mubadala The latest acquisition by Jynwel is a invite some Middle Eastern investors Development Company, the Qatar luxury quality women's lingerie brand based to be the core investors and asked if I Investment Authority (QIA) and the Abu in the UK. Through the acquisition of Myla, knew of potential blue-chip investors. Dhabi Future Energy Company (Masdar). Low has secured himself a directorship in So that is where it started. Eventually, He is also constantly promoting Malaysia to Lileston Ltd. both Mubadala and Kuwait Finance 1. Mubadala Development international investors. House’s US$1.2bil entry into Iskandar Company 5. EMI Music Publishing was a big boost for Malaysia,” he told 3. UBG Bhd the local daily in an earlier interview. THE Mubadala Development Company Low is also mentioned as the was established in October 2002 and is the WHILE working mastermind who made Autron a wholly-owned investment arm of the Abu under the Wynton substantial shareholder in Putrajaya Dhabi government. It is listed as a medium- Private Equity Perdana Bhd (PPB). The Singa- sized sovereign wealth fund, with assets Group, which he pore-based company and the Abu valued at US$55 bil in 2012. set up with funding Dhabi-Kuwait-Malaysia Investment With a mandate to facilitate the from friends, Jho Corporation (ADKMIC) – which Low diversification of Abu Dhabi’s economy, Low was involved in represents – teamed up to form Swan Mubadala invests in oil-and-gas, property negotiating mergers Symphony Sdn Bhd which acquired and the aerospace sector; all of which can and acquisitions, 50.6% of PPB from Eastern and Ori- be seen in Malaysia. Its focus is on managing seen through his EMI Music Publishing is part of Jho Low’s ental Bhd (E&O). long-term, capital-intensive investments that work with UBG Bhd. Jynwel Capital Ltd. Low’s link to the ADKMIC was clear deliver strong financial returns and tangible The company, The large group of investors in EMI when he was appointed to the board social benefits for the Emirate. involved in construction and water includes, among others, Sony Corp, the of directors of UBG Bhd in 2008, as a Jho Low is believed to have negotiated infrastructure, acquired a substantial Michael Jackson Estate and Mubadala representative of substantial share- with Mubadala to invest in Malaysia, shareholding in Loh and Loh Bhd, as well Development. It is not clear how much holder’s Majestic Masterpiece Sdn particularly through the projects of 1Malaysia as in Putrajaya Perdana Bhd in 2008, Jynwel’s direct stake in the deal is. Bhd, a subsidiary of the investment Development Bhd (1MDB). subsequently taking both companies The deal is reported to have given company’s. However, Low resigned on He and his brother Szen Low are on the private. Sony and its partners copyright over two November 2010 and was replaced by board of directors for the San Francisco- For his services, Low was made executive million songs and a global market share of his alternate, Tan Vern Tact, on Feb 2, based Viceroy Group of Hotels and Resorts, director for UBG in 2008. He resigned from 31%, which is some 9% more than closest 2011. owned by Mubadala. the post in November 2011. competitor Universal Music. FocusM Aug 24-30, 2013 12 lead

Family and friends

JHO LOW, or Low Taek Jho, is the third Emirates (UAE) Ambassador to the Unit- and youngest son of Datuk Larry Low, ed States. Yousef is the son of Dr Mana founder of Penang-based listed MWE Al-Otaiba, first oil minister for the UAE. Holdings Bhd. Yousef served for seven years as direc- Larry Low was reportedly unhappy tor of International Affairs for the court, with the attention which Jho Low was where he was also a senior adviser to His receiving and thus asked his son to keep Highness General Sheikh Mohammed out of the media. However, Jho Low later bin Zayed Al-Nahyan, head of the Abu told a Malaysian English-language daily Dhabi-based Mubadala Development that this was a misquote. Company. Born in 1982, Low studied at SJK (C) Of his two siblings, Jho Low seems to Union on Burmah Road, Penang and in have taken his brother Szen Low under May this year donated RM1 mil to his his wing in Jynwel Capital LLC based in former school. Hong Kong. In his youth, Low was sent to further Szen Low, also known as Low Taek his studies at Harrow in the UK. This is Szen, is registered with the California De- where Low says he made friends with partment of Alcohol Beverage Control as future Middle Eastern contacts, including a manager for a company named Wynton Prince Hamzah Al-Hussein of Jordan. Real Estate Beverly Hills LLC. The address Prince Hamzah is a son of the late provided on the licence is the L’Ermitage King Hussein of Jordan and was named Beverly Hills, a member of the Viceroy Crown Prince of the country until 1999, Group of Hotels. when the current King, his half-brother, His profile on the Jynwel website says rescinded the title. Hamzah holds the Szen Low has also worked for the prin- rank of Captain in the Jordanian Armed cipal investment and financing business Forces. of Citigroup’s Global Special Situations Low then furthered his studies at the Group in Hong Kong and has held posi- Wharton School of the University of tions at Goldman Sachs in its Principal Pennsylvania, a business school where he Investment Area in Hong Kong, where made friends with Hamad Al-Wazzan, in- he was involved in numerous highly volved in the Al-Wazzan Group of Compa- successful private equity investments in nies in Kuwait. The Al-Wazzan Group has Asia, notably in China. allegedly been involved in arms-dealing, Szen Low is a member of the board of but this has never been proven. the Viceroy Group, a director of Lilestone Another friend that Low has listed is Ltd and a member of the advisory board Low is said to be close friends with Paris Hilton, whose hotelier family owns the Hilton Hotel chain Yousef Al-Otaiba, the current United Arab of EMI Music Publishing. FocusM 14 mainstream

April 20-26, 2013 All is not well for Sime in Liberia Plantation investment in African nation plagued with problems

SAIFUL HIZAM MANSOR/FOCUSM WHAT was supposed to be a tions in cultivating oil palm and Timeline on cash cow for Sime Darby’s invest- rubber were forcefully suspend- Sime’s investment ment in Liberia now seems to ed when local communities be plagued with problems. With protested last year against the in Liberia issues related to the use of land taking of land which was right- by locals leading to a flare-up, slowdowns fully theirs under customary in operations and even the need for inter- law. 1977: Kumpulan Guthrie provided vention from Liberia’s president to defuse Another strike also occurred technical and management expertise strikes, the plantation giant faces a tough in February for two weeks due to the government-owned Liberian road ahead in the African country. to “labour abuse and other Rubber Processing Corporation. In 2009, Sime Darby’s forms of dehumanisation”. 1980: Kumpulan Guthrie acquires BF plantation division “At Sime Darby Planta- Goodrich’s concession area. signed a 63-year conces- tion-Liberia, which started op- 1980: Samuel Doe takes power sion agreement with the erations following the renewal through a coup d’état, overthrows Liberian government of its terms and conditions, this democratically-elected government of for 220,000ha to be is a frequent occurrence,” says a William R Tolbert. developed into oil palm by HAFIDZ quote from the news report and rubber plantations. BAHAROM The most recent strike 1981: Kumpulan Guthrie incorporated Sime Darby Plantation was only settled through the (Guthrie Plantations Inc) plans to Liberia Inc (SDPLI) was set up to manage the intervention of President Ellen develop 20,000ha of concession land plantations in Liberia and the first estate was Johnson Sirleaf herself. into rubber. launched in May 2011. In local reports on the 1985: Doe wins election with Now, four years down the road, details confrontation at Grand Cape accusations of rigging. are sketchy on the goings-on in the African Mount estate, Sirleaf blamed 1989: Pro-government politician nation. the people’s agitation on lack Charles Taylor flees Liberia, forms of proper information and con- the National Patriotic Front of Liberia Contradicting figures sultation from the government (NPFL) and triggers the start of What is surprising about Sime Darby’s opera- on their rights and limitations. the First Liberian Civil War. Guthrie tions in Liberia is the lack of concrete figures Bakke recently contradicted figures in the 2012 Sime Darby She says it was not too late to abandons rubber plantations. on the hectarage cultivated with oil palm. annual report when he was reported as saying that the correct “a collective mistake” Main factions sign a ceasefire. On its website, Sime Darby Plantation company had cleared 7,149ha and planted 5,021ha with oil from both the executive and 1995: palm as of January 2013 mentioned in a statement that it had de- the legislative branches of the 1996: Heavy fighting breaks out again veloped and planted oil palm on 1,180ha in Liberian government. until the signing of the Abuja Accord Liberia as of Dec 11, 2011, but in its 2012 Sime oil palm and rubber cultivation in Liberia “Now, something could have in Nigeria, which guarantees elections annual report it was listed as 3,350ha. Year Hectares of Net Book Value been done better when it comes the following year. Adding to the confusion, Sime Darby planted area (RM mil) to Sime Darby. More consul- 1997: Charles Taylor wins general group chief executive and president Datuk 2010 7,782 7.9 tations and more talks with election and becomes president. Mohamad Bakke Salleh was reported recent- 2011 7,782 22.9 the people should have taken However, fighting continues after ly as saying that the company had cleared place. Like the Senator [Sando Taylor is accused of funnelling 2012 3,350 61.8 7,149ha and planted 5,021ha with oil palm Johnson] said, everyone made diamond money and backing as of January this year, more than double the Source: Sime Darby annual reports mistakes when it comes to local guerrillas. Guthrie continues hectarage planted a month earlier. BLOOMBERG that. But what we should do is to correct the operations in Liberia. It thus raises the question: What is the mistakes; the ones we didn’t do that time we 1999: Second Liberian Civil War current cultivation status in Sime Darby and can still do now.” Sirleaf says at the oil palm begins involving the Liberian army led which figure is correct? estate where Sime Darby has planted a total by Charles Taylor, the Liberians United Furthermore, with the targeted invest- of 3,350ha of oil palm. for Reconciliation and Democracy ment plan in the African nation supposed to Sirleaf, however, promised that the con- (LURD) and the Movement for be at US$3 bil (RM9.09 bil), how much has cerns raised by the locals would be addressed. Democracy in Liberia. been invested so far? “The complaints that are justifiable and Kumpulan Guthrie once again With Bakke being quoted saying that it true, we will find a way to fix them. But 2001: abandons operations in Liberia. takes RM15,000 to cultivate one hectare, the complaints that are unreasonable, like does this mean that the company has already you say 1955 land business with Guthrie [a 2003: A ceasefire is signed among all spent some RM75.32 mil in cultivating the plantation under a British company then], parties, and Charles Taylor resigns as plantation land? If so, is the injection of we must not go back to 1955, this [is] 2012 president and is flown out to Nigeria RM300 mil announced in February part of we can’t go back.” Sirleaf reportedly told in exile. Vice President Moses Blah the investment plan or an additional cost? the crowd, adding that going against the takes over and hands power to the company was an act of undermining the National Transitional Government of Tensions rose at Sime Darby's Grand Cape Liberia. Human resource Mount estate in February, which led to a two- government which could lead to foreign and land concerns week strike that required Liberia President investors pulling out of the nation. 2005: Liberia holds presidential Also being raised are issues of human re- Ellen Johnson-Sirleaf’s intervention On the treatment of workers, Liberian election. Ellen Johnson Sirleaf elected sources, employment and land matters. vice president Joseph Boakai says Sime Dar- President. Furthermore, the company has yet to report explained its plans and current com- by should offer the same benefits received 2007: Kumpulan Guthrie, Golden disclose the hectarage already prepared pensations paid out to locals in Liberia. by Malaysians, such as good housing units, Hope and Sime Darby merge to for a Liberian local Outgrower’s Scheme, “Once the entire 220,000ha of concession medical benefits and fulfilment of CSR to become Synergy Drive, which is later similar to the Felda programme introduced land has been developed, SDPLI is expected Liberians. renamed Sime Darby Bhd. in Malaysia. According to the concession to provide 35,000 jobs in Liberia. Since 2010, The Malaysian palm oil company’s agreement, the Malaysian plantation giant SDPLI has paid approximately US$1.5 mil involvement in Liberia started with the 2008: Sime Darby returns to Liberia must develop some 44,000ha under this (RM4.56 mil) as compensation to surround- establishment of rubber plantations by and renews the terms and conditions scheme to assists local communities. ing towns and villages in the Grand Cape Kumpulan Guthrie Bhd between 1981 and of the old concession agreement with In its 2012 annual report, Sime Darby Mount County. In the year 2012 alone, the 2002. Guthrie withdrew from its investment the government of Liberia. had announced that it was employing some company also spent another US$63,000 on when the nation was engulfed in two civil 2009: Sime Darby’s subsidiary, Sime “3,719 Liberians in its operations with 16 corporate social responsibility (CSR) activi- wars. Darby Plantation, signs a 63-year Malaysian expatriates who provide guidance ties to provide assistance to the local commu- After the merger exercise of Guthrie, concession agreement with the and support to the local Liberian managers”. nities living within SDPLI operations,” Sime Golden Hope and Sime Darby in 2007, the Liberian government for 220,000ha to However, Liberian media has reported on Darby says in the annual report. newly-formed Sime Darby Bhd renewed be developed into oil palm and rubber April 1 that 600 contractors were terminated However, not reported in the local media its concession agreement with the present plantations. A new company, Sime because SDPLI was operating beyond capaci- were strikes by Liberians halting operations Liberian government led by Sirleaf. Darby Plantation (Liberia) Inc, was set ty and did not have “access to land”. of Sime Darby. International news agency Sime Darby Plantation has not comment- up to manage the oil palm and rubber Sime Darby has in its most recent annual Al-Jazeera reported that Sime Darby’s opera- ed on the issue at press time. plantations. 16 FocusM mainstream oct 12-18, 2013

Fresh from buying BMG Records and UK luxury lingerie brand Myla.com, Jho Low, aspiring oilman Malaysian high-flier Low Taek Jho – better known as Jho Low – is making a multibil- Malaysian high-flier Low Taek Jho makes multibillion-dollar bid for Canadian oil and gas company lion-dollar bid for Canadian oil and gas company Coastal Energy Corp. The offer worth US$2.3 bil (RM7.35 bil) comes through Jynwel Capital Ltd’s wholly-owned subsidiary Strate- gic Resources (Global) Ltd and Spanish oil company Compania Espanola de Petroleos SA (CEPSA). Jynwel Capital by Hafidz Baharom is Low’s international private equity investment and advisory firm based in Hong Kong. Well-connected Low, 31, is said to be linked to the Abu Dhabi government, helping to broker deals through the country’s investment arm, the Mubadala Development Company. Low is said to have helped secure from Mubadala investments in Malaysia worth billions. Adding to the intrigue is the fact that CEPSA was bought over in 2011 by International Petroleum Investment Corp (IPIC), an Abu Dhabi government entity. According to Canadian media Low’s reports, Jynwel and CEPSA have sent move to letters to Coastal Energy’s board of directors and hired Goldman Sachs as acquire a advisers for the deal. CEPSA is looking company to pay US$20 per share of Coastal Energy, a 20% premium for the com- listed in pany’s shareholders. Low is looking at venturing into oil and gas through the proposed acquisition of Coastal Energy Corp This offer is the second that Coastal Canada Energy has seen recently. In June 2012, may be the company “continuously evaluates results this year. been affected by some operational the Toronto Stock Exchange-listed opportunities to maximise shareholder However, the Malaysian production and mechanical issues,” Bartley says, (TSX) company received an offer from explained value”. figures did not turn up. In its quarterly adding the figure could have been PT Pertamina, Indonesia’s national oil by the O&G report ending June 30, Coastal Energy higher if not for mechanical difficulties company. The offer price then was a Southeast Asian focus president and CEO Randy Bartley says in Thailand. 15% premium of the share price then, player’s Low’s move to acquire a company listed Malaysian production figures have Low is the youngest son of Datuk totalling US$2.6 bil. presence in Canada may be explained by the been delayed by a quarter. Larry Low, founder of Penang-based However, Pertamina’s president di- O&G player’s presence in Southeast “Our previously-expected offshore investment holding company MWE rector Karen Agustiawan was reported in Asia. production ramp-up has been further Holdings Bhd. to have withdrawn the offer due to Southeast While based in Houston, Texas and delayed by damage sustained by the He has also been spotted partying disagreement on the proposed asset listed in Canada, Coastal Energy has two Mobile Offshore Production Units with American celebrities such as price. “Although the assets are good, Asia.” no operations in its home country. scheduled to be placed in service by hotel heiress Paris Hilton and singer the purchase price is too high and does Instead, its operations are centred on the beginning of the third quarter. Usher. Low is seen as a middleman not match the value of the assets,” she Southeast Asia, focusing on offshore This has delayed initial production in for Middle Eastern investors, helping was quoted as saying in the Jakarta Malaysia, and onshore and offshore Malaysia and the start-up of Songkhla to attract funds for projects under the Post. Thailand. H production in the Gulf of Thailand government’s 1Malaysia Development While the premium offered by It entered into an eight-year small- by approximately one quarter,” Bartley Bhd (1MDB). CEPSA and Jynwel may be higher, it field risk service contract (RSC) in July adds. It’s also worth noting that Low remains to be seen whether Coastal last year to develop and produce oil The CEO says in that quarter (Q2 assisted in setting up the Terengganu Energy accepts an offer US$300 mil from the Kapal, Banang and Meranti FY13), Coastal produced 23,843 bar- State Sovereign Fund, later incorpo- lower than Pertamina’s. cluster of small fields, with production rels of oil equivalent. rated by the federal government under Coastal Energy says “there is no from 17 wells which should have “Offshore production has increased Prime Minister Datuk Seri Najib Razak transaction to announce” but added affected the company’s second-quarter by 9% to 21,095 barrels a day but has to form 1MDB.

Petronas facing ‘bullying tactics’ by local government

 From page 14 region were facing similar treatment but they centred in the North, the pipeline connecting Tubarao Martello from OGX,” the industry Repsol, India’s Oil and Natural Gas Corp dealt with it just fine. the two has been a matter of dispute by the expert says. (ONGC), Oil India and Indian Oil Corp held “All of them are facing the same [treat- two governments, causing the crude oil sup- The expert was referring to Petronas’ the remaining 40% stake. ment], but they are handling [the issues] ply to be erratic. offer to purchase a 40% stake in two blocks of “They are really like gangsters in that and solving them one by one rather than just tycoon Eika Batista’s OGX Tubarao Martello country,” says one source from Petronas, packing up and leaving,” he points out. The Brazil option field in Brazil for US$850 mil. The Tubarao referring to some administration officials. The setback in Venezuela may have had However, the source suggests another possi- Martelo field is about 95km off the coast of Industry players and media reports indicate repercussions for Petronas’ RAPID project in ble scenario. What if Petronas had dumped Rio de Janeiro state. that Venezuela’s administration had been in a Pengerang, Johor. The RM60 bil project has Venezuela for greener pastures in another “But if Petronas goes big in Brazil, it would shambles in recent years due to the illness and been put on hold, with a final decision to be South American country? have enough resources to continue supplying subsequent demise of strongman president announced next year. Media reports have speculated that Petro- its RAPID project in three to five years,” the Hugo Chavez. “The RAPID project is supposed to process nas has been given the nod to bid for Brazil’s expert says. “The previous administration created some crude oil from two locations, Sudan and Ven- Libra oil field, the country’s largest oil discov- However, Petronas CEO Tan Sri Shamsul issues with the petroleum companies there as ezuela. The lack of supply from both locations ery. However, according to the country’s oil Azhar Abbas has said the deal would proceed well, but it was during the change in govern- – Sudan due to its separation issues and Ven- regulator, the 11 companies would have to only if OGX restructures its debts. ment that saw increasing pressure,” says an ezuela due to its government’s issues – makes pay up US$6.73 bil before bids are made. OGX is in danger of defaulting on its industry expert. the project unviable,” an industry source says. “Even if it is pulling out of Venezuela, it bond payments. The company has a 30-day However, another industry expert on the Petronas’ supply from Sudan has been de- could be venturing instead into Brazil. It grace period to settle the bond payments by ground in Venezuela says while Petronas was layed for the past three years after the nation is looking at the Libra oil field which could end-October before it is declared in default. facing what seemed to be “bullying tactics” by was divided into North and South. With the produce some eight to 12 billion barrels of oil At press time, Petronas had yet to respond the local government, other companies in the oil fields located in the South and operations equivalent. And then, there’s the purchase of to FocusM’s queries.