Friday, June 18, 2010

All Talk And No Action From UMW Holdings On Its Listing Of Its Oil and Gas Unit

It utterly shambolical!

As one of the bigger listed corporate in the stock exchange, you simply can NOT be making wishy washy announcements to the investing public.

Issue this morning is UMW's proposed listing of its oil and gas unit.

Yeah, it's a listing of a subsidiary and if judged by past recent history, such investing does carries a huge risk for the minority investor because the holding company does have an option of delisting it by take it private via a general offer.

Anyway, in regards to UMW's proposed listing of its subsidiary.

Last month I highlighted this issue: UMW Holdings Talks About Listing Its Oil And Gas Division ... Again

As stated, UMW stated it wants to list its subsidiary by year-end.

And as stated by that blog posting, UMW made this listing proposal way back on 28th Feb 2008!!

Yes it was that long ago!

And it kept saying they want to see "market conditions show sustained levels of improvement" before listing.

Yes, the want to get the best possible price and profits from the listing of its subsidiary!

And today, UMW struck once more!

It's now saying it wants to wait until the second half of the year before deciding!!!!

  • UMW Holdings Bhd (4588) wants to wait until the second half of the year before deciding when to list its oil and gas unit.

    It will be the fourth postponement since the diversified group received the Securities Commission's approval for the listing two years ago.

    UMW president and group chief executive officer Datuk Abdul Halim Harun said its oil and gas division has been seeing increasing revenues since the initial public offering (IPO) plans were announced.

    "We've decided to wait for a while so that we can have a bigger IPO and everybody can have a bigger share of the cake," he told reporters after UMW's annual general meeting in Shah Alam, Selangor, yesterday.

    UMW is also looking out for the right time and value for the 30 wholly-owned subsidiaries and associates grouped under its oil and gas stable, he added.
    The original listing proposal involved a public issue of 250 million new 50-sen shares, with the exercise expected to raise over RM400 million. The listed company would have had a market value of above RM1.5 billion.

    The group, 53.2 per cent owned by state fund manager Permodalan Nasional Bhd, derives a fifth of its revenue from the oil and gas division.

    Under its five-year plan, UMW aims to propel its oil and gas division to overtake automotive, which contributes 60 per cent to revenue and profit from its business ranging from distribution and sales to manufacturing and assembly of Toyota, Perodua and Lexus cars and related parts.

    The equipment and manufacturing divisions account for 15 per cent and 5 per cent respectively.

    The UMW group started its oil and gas business in 2002 and currently has operations in 12 countries. Its business activities include the manufacture of oil country tubular goods and line pipes, exploration, fabrication, provision of oilfield services and supply of oilfield products

    Source: UMW delays unit's listing again

That statement "We've decided to wait for a while so that we can have a bigger IPO and everybody can have a bigger share of the cake," just says it all for me.

They want everybody to have a bigger share of the cake.

Bigger cake? How nice!

I guess he means he wants a better IPO listing price for the Oil and Gas subsidiary.

Better price equals more expensive IPO, yes?

Gee.. if I were a perspective investor who only wants to invest in UMW's oil and gas subsidiary, how exactly would I feel about such a statement?

Again I would like to stress that if its subsidiary is really good and if the subsidiary is worth every ringgit and sen to be a listed entity by itself, poor economic or market condition is certainly a non-issue. During a listed company lifespan, they would experience all kind of economic cycles. Some good and some really terrible. That is to be expected.

And oh.. let's ass-u-me.

Say I had speculated in UMW back in Feb 2008. Reasoning is that I would benefit because the listing of the subsidiary would be a market catalyst for the stock to move higher. It's now June 2010, and UMW is still wishy washy on the proposed listing.


Do you think I have the absolute right to be disgusted and slam UMW Holdings for its utterly shambolic flip-flop decision making on the listing of the subsidiary?

I mean... comeon.. show some respect to the investing public.

If you want to say you want to list your subsidiary, just do it man! Seriously!

Don't just keep banging on the drums and say you want to list but yet no.

It's all talk and no action!

Do you think a woman would be impressed with a man suggesting a proposal but continues to postpone the actual commitment date?

Yeah... seriously.... do think about it!