Ramunia Fabrication Yard Deal With Oilcorp

On the Edge Financial: One day too late for Oilcorp?

• .... According to a filing with Bursa by Ramunia, Oilcorp’s 51% indirectly owned subisidiary Oilfab Sdn Bhd had accepted a letter of offer from Ramunia to acquire its Pulau Indah fabrication yard assets located on it for RM83.8 million on Jan 25.
  
  According to Ramunia, RM80 million of the purchase price would be satisfied via the issuance of 156.86 million new Ramunia shares to Oilfab at an issue price of 51 sen each while RM3.8 million would be paid for in cash.
  
  What is interesting about the deal is that Oilcorp was also delisted from Bursa on the same day. This certainly raised questions on the timing of the deal. Could the deal have saved Oilcorp from delisting had it sold the asset earlier?

And since it's now delisted... what will happen to this money?????

Such a huge asset sale... the timing of it ... yeah.. could the deal save OilCorp from being delisted?

• ... The acquisition may be a boon for Ramunia which found itself without a core business when it sold off its fabrication yard in Teluk Ramunia for RM515 million cash to Sime Darby Bhd last year.
  
  It was cash-rich after the disposal and was on the lookout to acquire other yards.
  
  Ramunia recently confirmed that it is in talks to acquire Syarikat Borcos Shipping Sdn Bhd which has a common shareholder in pilgrim fund Lembaga Tabung Haji (LTH). LTH holds 84% and 25.17% stakes in Borcos and Ramunia respectively.
  
  It has also signed a deal with Pleasant Engineering Sdn Bhd to utilise the latter’s yard, and expects to commence operations at the Pulau Indah fabrication yard next month via a tenancy agreement with Oilcorp.
  
  For FY10 ended Oct 31, Ramunia posted a net profit of RM65.79 million from RM34.86 million in revenue. For FY09, it had suffered a net loss of RM52.72 million on the back of RM296.67 million in revenue.
  
  Its cash and bank balances stood at RM27.8 million with an additional RM103.75 million in short terms deposits, and no bank borrowings.

Yeah... I also find the chain of events to be truly remarkable.

Ramunia... used to own a fabrication yard. ( Could someone tell me why they sold to Sime Darby? :P ). So it has zero business left. And what does Ramunia do? Buy back a smaller fabrication yard?

I am confused.

So confused.

:P

OilCorp: No Audited Accounts Due To Shortage Of Staff

This is NOT an earth shattering news clip but it is seriously disturbing to read such state of affairs in one of our listed companies. ( Hmm.. hope this is not one of the QUALITY stocks listed in the exchange!)

• Oilcorp fails to submit annual statements
  Written by Loong Tse Min
  Thursday, 15 April 2010 22:41
  
  KUALA LUMPUR: OILCORP BHD will be unable to issue its annual audited financial statements for the financial year ended Dec 31, 2009 (FY09) by the stipulated deadline on April 30, 2010, the company said on Thursday, April 15.
  
  In a statement on Thursday, the PN 17-affected issuer said it had on the same day asked for an extension from the stock exchange to file the financial statements by July 31, 2010.
  
  Among the reasons for the delay, Oilcorp said its negotiations with lenders as well as its unfinalised regularisation plan were expected to affect accounting issues and treatments, and as such, its directors felt that it would be appropriate to submit the audited accounts after "having the conceptual regularisation plan finalised".
  
  The company said it had been faced with a shortage of staff as a majority of them had left and rehiring was made difficult with its cash flow constraints, while the group's current state made it difficult to attract new applicants.
  
  Oilcorp said it was also engaging a professional firm of valuers to determine the valuation of the group's assets to assess impairment, the results of which would be made available by end-April.

Well? Is this acceptable or not?

What's the "having the conceptual regularisation plan finalised" got to do with audited accounts?

Shortage of staff issue? Majority of them had left and rehiring was made difficult with its cash flow constraints?

Is that a valid excuse? In the posting OilCorp's Fiscal year Losses Explodes To 405 Million! and OilCorp Needs To Explain More On Why It Lost 405 Million!, I have loaded a snap shot of OilCorp's balance sheet. See this

There is money in there yes? So what is this "rehiring was made difficult with its cash flow constraints" OilCorp is talking about? Why nobody wants to do their accounts? Why has the majority of the staff left?

Totally shocking, really!

Oilcorp said it was also engaging a professional firm of valuers to determine the valuation of the group's assets to assess impairment..

So what is wrong with the previous valuers? Weren't they not valuers? So what is this about engaging a PROFESSIONAL firm of valuers? Are OilCorp saying that the previous valuers are not professional enough?

Good grief!

OilCorp Needs To Explain More On Why It Lost 405 Million!

So on Saturday's: Oilcorp 4th quarter hit by bad debts

• Saturday March 27, 2010
  Oilcorp 4th quarter hit by bad debts
  
  PETALING JAYA: Beleagured Oilcorp Bhd suffered a net loss of RM175.95mil in its fourth quarter ended Dec 31, 2009, which was largely due to allowances for doubtful debts and impairment losses, which totalled RM134.44mil.
  
  The company’s full-year net loss totalled a whopping RM406.56 mil, giving it a loss per share of 185.18 sen per share.
  
  Oilcorp had failed to submit its fourth-quarter results on time, missing the Feb 25 deadline. As a result, Bursa Malaysia had suspended the trading of its shares since March 8.
  
  However, Oilcorp said in its statement yesterday that its shares would resume trading on March 29.
  
  Oilcorp also suffered a lower revenue for its fourth quarter, falling to RM39.86mil from RM84.40mil in the corresonding period last year.
  
  It said this was due to lower revenue from the oil & gas and engineering division.
  
  “ Almost all projects have come to a stand still,” the company said its announcement yesterday.
  
  Basic loss per share stood at 80.14 sen compared with basic earnings per share of 1.32 sen.
  
  Oilcorp’s full-year revenue fell to RM232.76mil from RM346.77mil previously.
  
  Its board of directors also expects the group to complete its proposed restructuring scheme within the year.
  
  Oilcorp, a PN17 affected issuer, had said earlier that the reason for being late in coming up with its fourth quarterly report was a shortage of staff.
  
  The company had said that it wished to submit the report only after its 2009 accounts is audited because it ‘’is uncertain whether there will be any material adjustments required to the accounts by the auditors, which may render the QR not giving a true and fair view if the QR is submitted at this juncture’’.

Now this doesn't sound so bad yes? The article doesn't portray OilCorp to be a rather poor company.

It was a simple allowance of bad debts and impairment of assets.

Now this is why it's rather to take what's printed in the financial news for granted.

Well for instance, the bigger issue, in my flawed opinion is that perhaps one should address the issue why did these bad debts happened.

Yes, why the need to reclassify their debts as bad debts?

As stated in the posting OilCorp's Fiscal year Losses Explodes To 405 Million!, OilCorp's receivables increased by an insane 274 million in 2 years. Why?

Was the company financially sound to allow their receivables to soar so insanely?

In the posting Regarding The Plunge Of OilCorp Shares Today! back in 2008, OilCorp was rather weak. As per its earnings notes and highlighted in the above posting:

• Long term borrowings......... 187,934
  Trade and other payables.... 254,851
  Short term borrowings......... 216,305
  
  Well that's what they owe 'others'. A cool 659 million!
  
  .. fixed deposit if 26.725 million and cash balances of 3.477 million.
  
  That's not a lot compared to what is being owed by them and most worrying is the 498.257 million in trade receivables!!!!

And the point was the receivables increased by an insane 274 million in just 2 years!

How?

In my flawed opinion, for OilCorp to announce that it is making provision for doubtful debts is not enough. It does not justify what has happened. All I want to know is why and how those receivables increased by an insane 274 million in just 2 years!

OilCorp's Fiscal year Losses Explodes To 405 Million!

The issue with OilCorp was so glaring.

The growth in the trade receivables was astronomical. My initial posting on OilCorp was in 2007, when I wrote, OilCorp and OilCorp II

Quote:

• And yes OilCorp share has been rising.
  All I can say is do not confuse a lousy share with a bull market!
  In a hot market any share does stand a possibility of rising.
  However, to use fundamental reasoning as a reason to buy this share is simply a pure insult to all investors!

In the first posting OilCorp (written in July 2007), if you scroll right to the bottom and open the quarterly earnings link, Quarterly rpt on consolidated results for the financial period ended 31/3/2007, look at the trade receivables then. It was 336.107 million. The previous year was 284 million.

A year later, Dec 2008, I wrote the following OilCorp and Its Trade Receivables. OilCorp's trade receivables has now exploded to 498.257 million back in 2008.

I asked back then..

• 'Two' fiscal years ago or 8 quarters ago, OilCorp's trade receivables were at 224 million.
  It's receivables this very day is at 498 million.
  An increase of some 274 million!!

Exactly!

That was the the problem.

OilCorp announced its earnings today. It lost a whopping 175 million for the quarter! Which meant that its annual losses was a shocking 405 million!!!!!!!!!!!!!!

I was eager to see its balance sheet and look at the receivables amount. I was pretty darn sure that provision of bad debts had to be made in regards to its receivables.

Receivables is now only 82.188 million!

OMIGOSH!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!

You can see the previous year same quarter total in the next column. It was only 474 million.

Well as they said... do the math!!!!!!!!!!!!!!!!

That was all I needed to see.

This morning I noted on the Business Times:

• Bursa eyes bigger retail growth
  The chief of Malaysia's stock exchange wants to see certain regulatory constraints removed to help improve retail participation in stock trading.

Why doesn't the Chief Of Malaysia stock exchange understand a very basic issue.

If the wants a bigger retail participation something drastic needed to be done with companies like OilCorp being listed in the stock exchange. Yeah, stop wishing and start cleaning and getting rid of them bad apples listed in the stock exchange.

Another Default In Payment By OilCorp

Saw this announcement on Bursa website.

• The Company had on 18 September 2009 announced that the Company has failed to meet its interest payment of RM1,643,806.85 due and payable on 17 September 2009 in respect of the Facility Agreement dated 9 September 2005 between EON Bank Berhad, CAPONE Berhad and OILCORP under a Primary Collateralised Loan Obligation (“CLO”) Transaction (“Facility”).
  
  The Company had on 29 October 2009 received a letter notifying a Declaration of Default under the Facility and the outstanding amount demanded under the Facility to be immediately due and payable as at 27 October 2009 are as stated in the said letter as follows:-
  
  Principal sum RM45,000,000.00
  
  Interest RM 1,951,471.23
  
  Default Interest RM 487,072.60
  
  Total RM47,438,543.83
  
  Should the Company fail to pay these amounts within fourteen (14) days, CAPONE Berhad may commence legal action against the Company for the recovery of the same.
  
  
  The Company is seeking legal advice on the matter.

Blogged previously: Regarding Oilcorp

And again the point to remember is that the major shareholders HAD sold down their shares ahead of 'these bad news'.

Oilcorp then (when I blogged Regarding Oilcorp) was 17.5 sen.

Oilcorp last traded at 11.5 sen.

How Much Do You Really Care About OUR Stock Market?

Posted on the chatbox.

• mydreamgetgold: Since our Securities Commission, the Star and NST are all sleeping, Malaysia Today should run a report of possible insider trading by Oilcorp Bhd directors. Recently, Oilcorp was slapped with the PN17 status and its shares tumbled. But before the announcement, its directors had been selling off their holdings relentlessly. Isn't that clear indication of insider trading? Look at the declaration published by Bursa.

Good point Dream!

Problem is... how many of Malaysian stock market 'players' (investors & traders & punters) really care?

Yes!

How much do YOU really care?

And when it comes to OPPORTUNITIES to make money in the market, people tend to forget what had happened before.

Most important is NOW!

How much can I make now?

No one makes money from past history!

Most important is what the stock will do NOW and the NEXT TRADED minute.

Take iCapital. Who will remember what they did early last year? Who will remember? Who cares?

Do you care at all?

Regarding Oilcorp

Blogged previously. And OilCorp Comes Crashing Down Once More!

Well Oilcorp really crashed!

What now?

If I am stuck at this stock, perhaps it's best to reevaluate my current position. Yes? That would be the logical thing to do yes?

Here are some main issues for me to consider.

1. What has OilCorp done lately?

Well, time to dig up some past.

June 2006. A step forward for Oilcorp in fisheries

• MOVING from oil and gas to fishing may seem a step backward for some, but for Oilcorp Bhd, the latter seems to hold more promise than what many people believe.
  
  The company sees revenue contribution from deep-sea fishing activity reaching in excess of RM300mil in five years, which would be far greater than what its current other core businesses, oil and gas (O&G) and property, would generate. Its O&G division is projected to earn RM200mil in revenue and its three property projects RM60mil.

Oil company going into deep-sea fishing????

Feb 2007. Oilcorp decides to do a 1 into 10 stock split!

What's the problem with such an exercise? Well, how much was Oilcorp trading back on Feb 2007? Around 1.10. And Oilcorp wanted to split every stock into 10! What's the rational? What's the point of such exercise? How does it reflect on the management? (This split was not implemented)

Apr 2007.

• Monday April 9, 2007
  
  Oilcorp unit sees new RM1b contracts
  
  By YVONNE TAN
  
  PETALING JAYA: Oilcorp Bhd subsidiary Oilfab Sdn Bhd expects to clinch RM1bil in new projects by 2009, given the industry’s bright prospects, its chief executive officer and managing director Mohamed Hazali Abu Hassan said.
  
  “In the current environment, we are convinced of being able to continue reaping more profits and opportunities as more offshore developments emerge,” he told StarBiz...

June 2007.

• Saturday June 30, 2007
  
  Oilcorp confident of RM1.73bil Mideast contract
  
  PETALING JAYA: Oilcorp Bhd is confident of securing a US$500mil (RM1.73bil) oil and gas contract in the Middle East, group managing director Sunny Ng Huat Tian said.
  
  “Chances of winning the project are very good,” he said after the company AGM... here

Aug 2007.

• 07-08-2007: Oilcorp wins RM290m fabrication job bby Woon Wu Lin
  
  KUALA LUMPUR: Oilcorp Bhd has secured its largest ever fabrication contract to the tune of RM290 million from Petronas Carigali–PTTEPI Operating Company (CPOC). Following this, Oilcorp officials alluded to the possibility of the group and other fabricators standing to benefit from other multi-billion contracts from Carigali and its umbrella contractors over the next five years...

Aug 2007

• Oilcorp sees RM135m from sale of hotel in KL
  
  By Chong Jin Hun
  jinhun@nstp.com.my
  
  August 15 2007
  
  OILCORP Bhd stands to generate at least RM135 million from sale of its upcoming hotel in Kuala Lumpur, the second of its four planned hospitality units comprising some 3,000 rooms it hopes to build in Malaysia in the near term.
  
  Oilcorp executive director Pua Yow Liang said the 375 rooms in the 33-storey hotel in Kuala Lumpur could be sold for between RM360,000 and RM600,000 each. The developer will, in turn, lease back and manage the properties....

Aug 2007.

• Wednesday August 15, 2007
  
  Oilcorp plans to launch three property projects worth RM1.2b
  
  KUALA LUMPUR: Oilcorp Bhd, an integrated holding company, aims to launch three new property development projects with a gross development value (GDV) of about RM1.2bil over the next four to five years.
  
  Executive director Pua Yow Liang said yesterday the projects were at KL Sentral, Genting and Pulau Indah....

Sep 2007.

• Tuesday September 18, 2007
  
  Oilcorp to list property and resort arm
  
  KUALA LUMPUR: Oilcorp Bhd's property and resort management arm, D'Tiara Corp Sdn Bhd, is en route to listing on the Alternative Investment Market (AIM) of the London Stock Exchange (LSE).
  
  Oilcorp said in a statement yesterday it had appointed international financial services firm Libertas Capital Group plc adviser for the flotation.
  
  D'Tiara is involved in property development, resort operation and property investment. It owns and manages the D'Tiara Beach Resort in Port Dickson....

Jan 2008

• Friday January 4, 2008
  
  Oilcorp O&G division to clinch more contracts
  
  PETALING JAYA: Oilcorp Bhd expects its oil and gas division to clinch more projects in the next three to six months.
  
  Petroliam Nasional Bhd (Petronas) is anticipated to award about RM10bil worth of new projects in the next three years to a handful of qualified fabricators, according to Oilcorp group managing director Sunny Ng.
  
  As of August last year, the six licensed Petronas fabricators were Oilfab Sdn Bhd, Brooke Dockyard & Engineering Works Corp, HL Engineering Sdn Bhd, Malaysian Marine Heavy Engineering Sdn Bhd, Ramunia Fabricators Sdn Bhd and Sime Darby Engineering Sdn Bhd, he said after Oilcorp's EGM yesterday..

So much promises. Let's take a look at how Oilcorp performed as per its own earnings announcement back in Feb 2008. Quarterly rpt on consolidated results for the financial period ended 31/12/2007

It made some 3.5 million ringgit but pales in comparison to its last fiscal year earnings, same quarter, earnings of 6.6 million. And this comes on the back of a surging sales revenue! Sales revenue for the whole fiscal year was 456 million compared to its previous year revenue of 153 million.

And if you look into the balance sheet, the trade receivables showed that its receivables soared to 553.014 compared to previous year 284.033 million.

Hmm..... on a year-year comparison, sales soared by 303 million, receivables soared by 268 million and net profit only increased by a measly 1.358 million!!!!

Does this sound right? If a company sales increased by a whopping 303 million, why did its net profit only increase so little?

Its cash balances was 62.749 million and it had 328.699 million in loans.

Last year?

Its cash balances were 10.642 million and it had 220.376 million in loans.

Hmm... looks like its cash balances worsen.

So how?

Let me address the earlier question again.

Does this sound right? If a company sales increased by a whopping 303 million, why did its net profit only increase so little? And why did its cash balances worsen so badly despite all massive increase in sales revenue? What's happening here?

21st May 2008. All hell broke loose!

• Oilcorp revising 2007 audited accounts
  
  By Adeline Paul Raj Published: 2008/05/21
  
  The company is in talks with its auditors to resolve a disagreement 'on a long-term contract amounting to RM110 million, inclusive of a variation order of RM20 million'
  
  OILCORP Bhd, an engineering services firm, may cut its 2007 pre-tax profit figure by 68 per cent due to differences with its auditors on the accounting treatment of a contract.
  
  It told the stock exchange yesterday that it would be amending its 2007 annual audited accounts because of a disagreement between the management and the auditors "on a long-term contract amounting to RM110 million, inclusive of a variation order of RM20 million".
  It did not provide details on the contract.
  
  Based on the auditors' proposed accounting treatment, Oilcorp's pre-tax profit would be reduced to RM7 million from RM22 million.
  
  This means that its pre-tax profit for 2007 would have declined by 46 per cent from a year ago instead of rising 69 per cent.
  
  The company is in discussions with its auditors to resolve the disagreement, and expects to take two weeks to come to a resolution.
  
  "Once we resolve this issue with the auditors, we expect to be able to submit the amended (audited accounts) by June 9," Oilcorp said in the statement.
  
  Trading in the main board-listed company's shares was suspended yesterday pending the announcement.
  
  It will continue to be suspended until Oilcorp submits the amended accounts, together with the auditors' and directors' reports, to Bursa Malaysia.
  
  The stock last traded at 78 sen....

How?

Now if one puts into perspective and compared this to all the highly optimistic articles published on the press, how would you evaluate this company?

Look back again at the chain of events. Oil company going big time into deep-sea fishing. Billion dollar contract expectations in oil industry and billion dollar property projects and now dispute in its audited accounts.

Suspect?

And what has happened to Ascentland's listing in AIM?

July 2008.

• Follow order or face penalties, Oilcorp warned
  
  Published: 2008/07/26
  
  THE Securities Commission (SC) has warned Oilcorp Bhd of "civil and criminal penalties" if it fails to comply with an order to let an auditor investigate its books.
  
  This came after Oilcorp appeared to challenge the SC's directive by questioning Baker Tilly Monteiro Heng's (BTMH) appointment by the regulator and invoked the threat of legal action against the auditor...

July 2008. Oilcorp – drilling for truth

• ..... Strip away the bad blood and background noise, and you’ll find allegations and counter-allegations of misconduct, conflicts of interest, and lapses in the performance of duty. If they indeed happened, many of these are punishable offences.
  
  It would be reckless to dismiss these accusations and insinuations without investigations, never mind that some appear to be trivial and diversionary.
  
  This is why it’s great that the Securities Commission (SC), Bursa Malaysia and the Malaysian Institute of Accountants (MIA) have started probing. At this point, only they have the authority and resources to untangle this mess....

31st July 2008.

• 31-07-2008: MARC revises status of Oilcorp notes to negative
  
  Malaysian Rating Corporation Bhd (MARC) has revised its MARCWatch status of its MARC-2ID/A-ID ratings on Oilcorp Bhd’s RM70 million Murabahah Underwritten Notes Issuance Facility/Islamic Medium Term Notes Facility (MUNIF/IMTN) to negative from developing.
  
  The rating agency said it was concerned that a prolonged accounting dispute would affect Oilcorp’s access to capital and may result in disciplinary action by the regulators...

Aug 2008. Unable to name new auditor or no one wants the job???

• 12-08-2008: Oilcorp unable to nominate new auditor
  by Doreen Leong
  
  KUALA LUMPUR: Oilcorp Bhd has not been able to nominate another firm as its statutory external auditor, with the absence of a professional clearance from its previous auditor Baker Tilly Monteiro Heng (BTMH) hanging over the oil and gas services provider.
  
  As such, sources said pursuant to the Companies Act, the Companies Commission of Malaysia (CCM) would have the authority to appoint a new audit firm to act as Oilcorp’s external auditor....

Nov 2008. Still talks of winning billion dollar contracts!

• Oilfab eyes RM1b deals by 2010
  
  By Presenna NambiarPublished: 2008/11/18
  
  Oilfab Sdn Bhd, a subsidiary of Oilcorp Bhd, says it targets to win projects worth RM1 billion by 2010, with more big jobs coming its way.
  
  The completion of work on the extension of its bulkhead (platform in which the topside and jacket is built) and seawall this month will enable it to construct structures of more than 10,000 tonnes, from 2,000 tonnes now.
  
  A seawall is a structure that protects the shoreline against erosion...

4th December 2008. Oilcorp submits new accounts

• ... The value of the project was disputed earlier this year, leading Bursa to order a re-audit of its accounts.
  
  Meanwhile, in its filing with Bursa Malaysia yesterday, Oilcorp said the group’s audited net profit for FY07 was RM4mil compared with its unaudited result of RM15.4mil reported on Feb 29, due to adjustments such as allowance for doubtful debts, deferred tax expenses and professional fees.

Its fy 2007 earnings is now only 4 million?? From reporting an earnings of 15.4 million. it's now restated to just 4 million???? How big of a deviation is this?

December 2008. Converting debts into shares!

• 04-12-2008: Oilcorp exchanges debt for equity, accounts cleared
  by Joyce Goh
  
  KUALA LUMPUR: Oil and gas fabricator Oilcorp Bhd has proposed to covert RM80 million in debts owing by its clients into a 10% equity stake in loss-making Renewable Fuel Corp Inc (RFC). The company’s long-overdue accounts for the financial year ended December 2007 also passed the scrutiny of its auditors and were finally submitted to Bursa Malaysia.
  
  In a statement to Bursa yesterday, Oilcorp said its indirect wholly owned subsidiary, Oilcorp International Limited, had entered into a conditional agreement for the proposed subscription of 2.2 million preferred stocks in RFC to be satisfied by the conversion of debts owed by Plant Biofuels Corporation Sdn Bhd (PBC) and Optimis Tegus Sdn Bhd of RM40 million each.
  
  These debts are due to Oil-Line Engineering & Associates Sdn Bhd (OLEA), a wholly owned subsidiary of Oilcorp.
  
  RFC is involved in the manufacturing and distribution of bio-diesel and blended diesel fuels in the US. It posted a net loss of US$1.7 million for the financial year ended Sept 30, 2008, mainly due to administrative expenses. The company was incorporated in September 2007...

And RFC which was the root of all accounting issues posted a net loss of US$1.7 million.

And Oilcorp does a debt into equity deal with RFC?????

11th December 2008.

• 11-12-2008: Oilcorp shares plunge on resumption of trading
  
  KUALA LUMPUR: Oil and gas fabricator Oilcorp Bhd saw its share price tumble by almost 50% after it resumed trading following its suspension in May this year for failing to submit its audited accounts for the financial year Dec 31, 2007.
  
  The accounts could not be submitted as the management of Oilcorp and its auditors were in disagreement over the contract value of a job secured by the company to build a biofuel plant...

Made two blog postings on that day. Regarding The Plunge Of OilCorp Shares Today! and OilCorp and Its Trade Receivables

Oilcorp share price down 15%

• .... Under the PN17 rules, the company is obliged to regularise its financial conditions within a certain timeframe or face delisting.
  
  Oilcorp also said it did not have a formal regularisation plan at present, but it would shortly appoint a principal adviser to formulate such a plan. It added that it would continue to negotiate with its lenders.
  
  On Friday, it said the interest payment was part of the facility agreement between EON Bank Bhd, Capone Bhd and Oilcorp under a primary collateralised loan obligation (CLO).
  
  “The company had on Sept 15 written to Malaysian Trustees Bhd to seek indulgence of time of up to one month from the due date to remedy the matter,” Oilcorp said, adding that the lender and trustee had yet to declare Oilcorp in default under the facility agreement.
  
  If such declaration of default were made, the CLO would be immediately payable together with the accrued interest, it said, adding that such default would impact business, financial and operations.
  
  Oilcorp expects to resolve the issue if given the indulgence period, as it is pursuing the payment of receivables. The options available to lenders would be to issue legal proceedings against the company.
  
  The company is seeking legal advice as to whether such a default constitutes an event of default under any other loan agreements.
  
  “The directors are unable to form an opinion that the company will be able to meet its debts as they fall due and accordingly the company is not solvent,” Oilcorp said.
  
  Last Friday also saw the resignation of two of the company’s non-executive and independent directors Tuan Raime Unggi and Sim Ti. They are also members of the audit committee. Oilcorp now has only one independent director.
  
  The company, which is involved in oil and gas, special projects, hotel, resort operation and property investment, and deep-sea fishing, is heavily geared with net debt of RM421.8mil as at end-June.
  
  Malaysian Rating Corp Bhd (MARC), in an email reply to StarBiz, said Oilcorp’s liquidity position was very weak and it had limited options to stabilise its credit profile.
  
  Oilcorp had relied on its moving receivables from oil and gas majors as a source of liquidity, it said, adding that the company was unlikely to be able meet its obligations unless it quickened its trade receivables collection, or rely on external support.
  
  The rating house had recently downgraded Oilcorp’s RM70mil Murabahah underwritten notes issuance facility/Islamic medium-term notes facility (Munif/IMTN) to MARC-4ID/BBID from MARC-2ID/A-ID.
  
  Oilcorp failed to deposit the balance of RM10mil into the designated accounts for the Munif/IMTN facility due on Sept 7, before the RM20mil redemption on Oct 7.
  
  “MARC has been informed that the sole bondholders of the Munif/IMTN have granted indulgence of up to three months to Jan 7, 2010 in order to meet the sinking fund due on Sept 7 and redemption due in October,” the rating house said.
  
  Oilcorp posted a wider net loss of RM1.5mil for the second quarter ended June 30 versus RM1.02mil in the previous corresponding period, as revenue fell 15% year-on-year to RM69.5mil.
  
  Earlier this month, subsidiary Oilfab Sdn Bhd secured a RM36mil job for Brownfield Retrofit Project from Carigali Hess Operating Co Sdn Bhd.
  
  Oilcorp had previously delayed its 2007 audited accounts due to disagreement between the management and the auditors over the value of a contract. The management, when contacted by StarBiz, declined comment.

MARC's original press statement was published on Business Times.

• MARC downgrades Oilcorp's RM70m Islamic debt
  
  Published: 2009/09/12
  
  MALAYSIAN Rating Corp Bhd (MARC) has downgraded Oilcorp Bhd's RM70 million Islamic debt to "BB" from "A-" due to concerns that it may not be able to settle the debt.
  
  Oilcorp, which is involved in oil and gas engineering, property development and deep sea fishing, has failed to deposit RM10 million into an account on September 7 to repay part of the debt due on October 7.
  
  It needs to pay back RM20 million on that day, MARC said in a statement.
  
  Oilcorp had identified certain receivables, primarily arising from variation orders, to make the September payment.
  
  "However, the group has failed to make any notable progress on collection of its stagnant receivables amounting to RM347.8 million in the first six months of 2009 and its receivables turnover increased to 567 days,"
  
  MARC said Oilcorp has no other sources of potential liquidity apart from outstanding receivables that it may rely on to meet the upcoming obligation.
  
  Nonetheless, Oilcorp has got a time extension to make the sinking fund payment from its sole bondholder.
  
  Oilcorp made an unaudited loss before tax of RM0.5 million for the first half of 2009 on the back of falling revenue.
  
  Net cashflow from operating activities during the period was negative RM20.7 million.
  
  MARC could downgrade the debt further if Oilcorp could not find other sources of repayment closer to the October redemption deadline.

How would one evaluate what Oilcorp has done lately?

Take away all the contract awards, and the accounting issues, what does one have?

Let's look at MARC assessment. Net cashflow for the period was negative rm20.7 million, company not making money, and now, as per Star Biz article, "Oilcorp failed to deposit the balance of RM10mil into the designated accounts for the Munif/IMTN facility due on Sept 7, before the RM20mil redemption on Oct 7. "

Oct 7 comes very fast!

How?

2. What about Oilcorp the stock?

As we have seen time and time again, stocks don't usually follow its fundamentals. Stocks do fly without wings, just like Peter Pan!

So for one that is stuck in Oilcorp, perhaps with the current incredible bullish market undertone worldwide, one feels that perhaps Oilcorp could see some sort of bounce, for they argue nothing could go down forever.

Yes, there's a chance that one could see a technical rebound in the stock after falling so drastically.

But then, there's still a chance that Oilcorp could go down much, much more!

Why not?

Because since Oilcorp is now a newly designated PN17 stock, chances are more that Oilcorp could go down much more! (Well here's what one can go. One can dig up all the PN 17 stocks and check their performances during the early stages after being designated as a PN 17 stock. What do you see?)

And it's not easy for one to get out of the PN 17 status.

Companies are designated as a PN 17 stock for a reason and the reason is that the companies are rather extremely poor in its fundamentals. Remember MARC statement, company is in a negative cash flow of 20 million! Company has huge debts due and the company not making money.

Collecting of debts is always possible but let's look at MARC's statement again, "the group has failed to make any notable progress on collection of its stagnant receivables amounting to RM347.8 million in the first six months of 2009 and its receivables turnover increased to 567 days,"

Receivables turnover increased to 567 days!

What kind of receivables are those?

567 days and Oilcorp could not collect.

How do you rate Oilcorp chances of collecting these debts in the near future?

Unable to collect these debts is one thing but the longer it remains un-collected, sooner rather than later, Oilcorp needs to re-classify these debts.

And when it's reclassified, it's BAD DEBTS. And bad debts equates to accounting losses.

Consider this. Oilcorp's current market cap at 17.5 sen is some 38.420 million.

And what is the size of Oilcorp's receivables? Some 489 million!

What if just half of its debts is reclassified as bad debts and into accounting losses? Half would be some 244 million! Which is more than Oilcorp's equity!

How?

Huge mess, yes?

If Oilcorp was not in such a deep mess, surely it would have wanted to be designated as a PN 17 stock, yes?

And remember that under the PN17 rules, the company is obliged to regularise its financial conditions within a certain timeframe or face delisting.

And what if the stock is delisted?

How then? Would you rate your chances betting on this stock?

And given the fact that there are so many other stocks, surely one have to ask, "Why bet on this stock? No other better stocks to bet on?"

3. Any sell down in shares by the major shareholders?

Yes!

Notice of Person Ceasing (29C) - NG HUAT TIAN
Changes in Sub. S-hldr's Int. (29B) - PRAMADDUN HOLDINGS SDN BHD
Notice of Person Ceasing (29C) - GENESIS ACRES SDN BHD

Vote of confidence?

And if one is still a shareholder, how would one feel? The smarter insiders, had already cashed out before the 'bad' news.

4. What to do now?

Is it too late to consider the fact that this is a terrible mistake to 'invest' in Oilcorp?

Consider this statement again from Mr.Soros... "I'm only rich because I know when I'm wrong."

Is it too late to sell?

What if the stock goes below 10 sen?

Yes, one could hold. One could bet that Oilcorp could recover one day.

But when you consider all the issues mentioned so far, how do you rate your chances?

What if Oilcorp do not recover?

What if Oilcorp receivables are classified as bad debts?

What if Oilcorp is delisted?

And OilCorp Comes Crashing Down Once More!

Dejavu!

It just an accident waiting to happen!





Oilcorp share price down 15%

• PETALING JAYA: Spooked by the spectre of Oilcorp Bhd slipping into Practice Note 17 (PN17) status, investors sold down the stock yesterday, loping as much as 20% off the share price before the counter closed at 26.5 sen, a fall of 5 sen or 15%.
  
  Last Friday, Oilcorp said it had failed to make an interest payment of RM1.6mil because it did not have sufficient funds due to the delay in collecting certain large receivables.
  
  Trading in the stock was halted the same day and resumed yesterday. Oilcorp was one of most heavily traded counters for the day.
  
  Investors’ fears were confirmed when the company announced after 5pm that it was an affected issuer under PN17 of Bursa Malaysia’s listing requirements because it had defaulted on the interest payment and could not provide Bursa with a solvency declaration.
  Under the PN17 rules, the company is obliged to regularise its financial conditions within a certain timeframe or face delisting.
  
  Oilcorp also said it did not have a formal regularisation plan at present, but it would shortly appoint a principal adviser to formulate such a plan. It added that it would continue to negotiate with its lenders.
  
  On Friday, it said the interest payment was part of the facility agreement between EON Bank Bhd, Capone Bhd and Oilcorp under a primary collateralised loan obligation (CLO).
  
  “The company had on Sept 15 written to Malaysian Trustees Bhd to seek indulgence of time of up to one month from the due date to remedy the matter,” Oilcorp said, adding that the lender and trustee had yet to declare Oilcorp in default under the facility agreement.
  
  If such declaration of default were made, the CLO would be immediately payable together with the accrued interest, it said, adding that such default would impact business, financial and operations.
  
  Oilcorp expects to resolve the issue if given the indulgence period, as it is pursuing the payment of receivables. The options available to lenders would be to issue legal proceedings against the company.
  
  The company is seeking legal advice as to whether such a default constitutes an event of default under any other loan agreements.
  
  “The directors are unable to form an opinion that the company will be able to meet its debts as they fall due and accordingly the company is not solvent,” Oilcorp said.
  
  Last Friday also saw the resignation of two of the company’s non-executive and independent directors Tuan Raime Unggi and Sim Ti. They are also members of the audit committee. Oilcorp now has only one independent director.
  
  The company, which is involved in oil and gas, special projects, hotel, resort operation and property investment, and deep-sea fishing, is heavily geared with net debt of RM421.8mil as at end-June.
  
  Malaysian Rating Corp Bhd (MARC), in an email reply to StarBiz, said Oilcorp’s liquidity position was very weak and it had limited options to stabilise its credit profile.
  
  Oilcorp had relied on its moving receivables from oil and gas majors as a source of liquidity, it said, adding that the company was unlikely to be able meet its obligations unless it quickened its trade receivables collection, or rely on external support.
  
  The rating house had recently downgraded Oilcorp’s RM70mil Murabahah underwritten notes issuance facility/Islamic medium-term notes facility (Munif/IMTN) to MARC-4ID/BBID from MARC-2ID/A-ID.
  
  Oilcorp failed to deposit the balance of RM10mil into the designated accounts for the Munif/IMTN facility due on Sept 7, before the RM20mil redemption on Oct 7.
  
  “MARC has been informed that the sole bondholders of the Munif/IMTN have granted indulgence of up to three months to Jan 7, 2010 in order to meet the sinking fund due on Sept 7 and redemption due in October,” the rating house said.
  
  Oilcorp posted a wider net loss of RM1.5mil for the second quarter ended June 30 versus RM1.02mil in the previous corresponding period, as revenue fell 15% year-on-year to RM69.5mil.
  
  Earlier this month, subsidiary Oilfab Sdn Bhd secured a RM36mil job for Brownfield Retrofit Project from Carigali Hess Operating Co Sdn Bhd.
  
  Oilcorp had previously delayed its 2007 audited accounts due to disagreement between the management and the auditors over the value of a contract. The management, when contacted by StarBiz, declined comment.

The mess with Oilcorp was there from day one.

The delay "in collecting certain large receivables"?

Warned last year, OilCorp and Its Trade Receivables.

• If you compare the 498 million in receivables for OilCorp's most recent reported quarterly earnings to the same corresponding period a year ago, OilCorp had 465 million in receivables. An increase of some 33 million in receivables in 'one' fiscal year.
  
  Now look at OilCorp sales revenue. It's only a paltry 76 million and its previous quarter was some 81 million.
  
  Now to have only sales revenue of less than 100 million, don't you think it's rather incredible to have trade receivables amounting to 498 million?
  
  I do think so. Very much in fact.

And worst still the problems with its account had caused its shares to tumble last December too! ( see Regarding The Plunge Of OilCorp Shares Today! )

---------------------

see latest update: Regarding Oilcorp

Regarding The Plunge Of OilCorp Shares Today!

Quite some chatter over OilCorp today.

Here is a short clip from Dow Jones Newswire.

• OilCorp (3697.KU) hits limit down threshold, down 38.5% to 48 sen on requotation; stock suspended since May 20 pending reaudit of company's accounts for 2008 after discovery of discrepancies. Clarifies audited group PATAMI for FY07 is MYR3.975 million vs unaudited result of MYR15.41 million. Deviation of more than 10% between the two figures attributed to adjustments made to various costs and "adjusting events." Oilcorp also submitted yesterday 2007 annual report and quarterly results up to period ended Sept. 30, 2008. For 9-month period ended Sept 30, Oilcorp posted loss of MYR2.3 million from MYR262.4 million in revenue vs revised net profit of MYR11.9 million from revenue of MYR277.1 million in previous year. "The selldown is not surprising. Investors are just looking to conserve whatever cash they can. There's just way too much selling pressure after so many months of suspension," says dealer

I decided to take a peep.

Just a small tiny weenie peep.

Long term borrowings......... 187,934
Trade and other payables.... 254,851
Short term borrowings......... 216,305

Well that's what they owe 'others'. A cool 659 million!

And what they have to offer is the following...

Ahem.. fixed deposit if 26.725 million and cash balances of 3.477 million.

That's not a lot compared to what is being owed by them and most worrying is the 498.257 million in trade receivables!!!!

The size of it is simply unbelievable!

Look at its share capital. It's only some 219 million!

Think for a moment.

What if due to 'unknown' circumstances, OilCorp could not collect half, yes just half, of these debt owing to them and needs to write it off as bad debts? (Is this not possible? Check past earnings. If these receivables could be collected, the amount should never be so much! Yes?)

Well half of that 498.257 million is some 249+ million!

Which is more than its share capital!!!!!!!!!!!!!

How?

This is totally unreal yes?

And to make it worse, OilCorp 'can' only manage a PAT (profit after tax) Loss of 3.3 million!

How?

And remember as it is, OilCorp owes 'others' some 659 million!!!

And if remember correctly, some local 'experts' called this a 'fundamental' stock!!

OilCorp II

Here's an update to OilCorp

Let's have a look at OilCorp's property section.

Posted on Business Times:

• D'Tiara's revenue may hit RM200m in 4 years
  By Roziana Hamsawi
  roziana@nstp.com.my
  
  July 16 2007
  
  OIL and gas support specialist Oilcorp Bhd expects its property subsidiary D'Tiara Corp Sdn Bhd's revenue to increase fivefold to RM200 million in four years.
  
  D'Tiara, which posted a revenue of some RM27 million last year, is confident that from 2011 onwards its revenue would be between RM150 million and RM200 million.
  
  Oilcorp executive director Phua Low Yiang said the confidence stems from the three projects that the company would soon undertake.
  
  They comprise a two-tower hotel suites and offices project at nearby KL Sentral, a leisure and health resort in Genting Highlands, Pahang, and a waterfront resort in Pulau Indah, Port Klang.
  
  Phua said total GDV for the three projects are currently estimated at RM1.3 billion and D'Tiara is in discussion for a listing on the Alternative Investment Market (AIM) of the London Stock Exchange to raise funds for the projects.
  
  "The intention is to list on AIM. We have nominated two advisers and are still in the midst of talks," Phua told Business Times in an interview.
  
  The 33-storey hotel and 33-storey office block project in Kuala Lumpur is expected to be launched early next month. The project's GDV is valued at RM330 million.
  
  The 14ha project in Genting Highlands, featuring bungalow lots and 20 resort villas, is still awaiting approval from the Securities Commission. Its GDV is estimated at about RM60 million.
  
  Both the projects are expected to be completed in 2010.
  
  The waterfront project in Pulau Indah meanwhile is a bigger version of the Tiara Beach Resort, which will incorporate an upmarket villa resort, canal bungalows for sale to the public and a commercial seafood centre.
  
  "Estimated GDV (of the Pulau Indah project) is RM890 million for the first 40ha of it while the remaining land will be developed only after the completion of the first phase," said Phua.
  
  He is confident that the project will change the public's perception of Pulau Indah and will be a centre of attraction.
  
  "The water there is still, calm and green. It is perfect for water sports," he said.
  
  All of the three projects will be sold to interested buyers who will then lease them back to D'Tiara.
  
  "This kind of model has worked well for us and for the investors too as they get good returns from this kind of arrangement," said Phua.
  
  Today, the bulk of D'Tiara's revenue comes from the two-year-old 980-room Tiara Beach Resort in Port Dickson, Negeri Sembilan.

Posted on the Edge.

• 16-07-2007: Oilcorp may list unit on AIM
  by Fintan Ng
  
  Oilcorp Bhd is contemplating listing its property arm, D'Tiara Corp Sdn Bhd, on the London Stock Exchange's Alternative Investment Market (AIM) in the third quarter (3Q) of next year.
  
  Oilcorp executive director Pua Yow Liang told The Edge Financial Daily the company was in the process of engaging an adviser for the proposed listing. He said a firm decision on the proposed listing would be made by September next year.
  
  "We have reached a stage where we can expand overseas and we would rather go to AIM," Pua said, adding that the Securities Commission was at present not too keen on the listing of property development entities.
  
  "We're launching three projects this year and next and that will require a lot of capital. These will give us a turnover in the next four to five years of up to RM1.2 billion, that's why we're planning to spin off the property arm and list it on AIM," he said.
  
  Currently, there are an estimated 98 pure property development companies listed on Bursa Malaysia.
  
  Pua said the amount to be raised and the percentage of shares Oilcorp would be retaining in the AIM-listed entity had not been determined. Other than property development and investment, Oilcorp's core businesses are in oil and gas, and fisheries.
  
  If successful, its property arm will follow in the footsteps of other Malaysian companies that have listed on AIM, namely Steppe Cement Ltd, Infoscreen Networks, Peninsular Gold, Velosi Ltd, GMO Ltd, Biofutures International, Mobility One Ltd and Plant Offshore Group Ltd.
  
  "We're injecting D'Tiara Beach Resort and three projects into the AIM-listed entity, which is valued at up to RM300 million, and an Oilcorp subsidiary will be set up to manage the company," Pua said.
  
  The three projects it will be launching are the 300-acre leasehold D'Tiara Waterfront Resort in Pulau Indah, Selangor with a gross development value of RM820 million for the first phase, the 2.19-acre freehold D'Tiara Hotel Suites in Brickfields with a GDV of RM320 million, and the 3.5-acre freehold Genting D'Tiara Leisure and Health Resort with a GDV of RM80 million.
  
  It also manages D'Tiara Beach Resort in Port Dickson, Negeri Sembilan on a sale-and-leaseback model.
  
  "We're positioning the property arm not only as a developer but also as a resort operator," Pua said.
  
  The residential property components of the Pulau Indah and Brickfields projects will be run on a sale-and-leaseback model with a guaranteed 7% net yield on five-plus-five-year leases.
  
  For the financial year (FY) ended Dec 31, 2006, the property arm contributed 15% of Oilcorp's revenue of RM153.23 million. Oilcorp posted a net profit of RM13.11 million in the same period.

Sounds extremely interesting eh?

Here are some links to OilCorp's recent earnings.

26th Feb 2007. Quarterly rpt on consolidated results for the financial period ended 31/12/2006

Click on the notes pdf file attached. See page 4.

Have a look at the screenshot below and check out OilCorp's property division.



Here's the link to their earnings in May 2007. Quarterly rpt on consolidated results for the financial period ended 31/3/2007. Again, have a look at the pdf file attached. Here's a screenshot of what I am looking at.

How?

• Oilcorp Bhd is contemplating listing its property arm, D'Tiara Corp Sdn Bhd, on the London Stock Exchange's Alternative Investment Market (AIM) in the third quarter (3Q) of next year.

Will OilCorp property arm be able to list on AIM next year? I have no idea but that's OilCorp's aim and yes it's always great to have a goal in each company but as it is, this property arm of theirs simply does not have a good track record, yes?

And yes OilCorp share has been rising.

All I can say is do not confuse a lousy share with a bull market!

In a hot market any share does stand a possibility of rising.

However, to use fundamental reasoning as a reason to buy this share is simply a pure insult to all investors!

OilCorp

It's truly amazing.

OilCorp was listed in place of Abrar Corporation back in 2003.

Flashback July 26th 2003. Published on Star Bussiness.

• OilCorp hopeful for more jobs
  
  BY TEE LIN SAY
  
  “IN our sector, how successful you are depends on how much you can cover under the oil and gas industry,” says OilCorp Bhd managing director Sunny Ng.
  
  Indeed, OilCorp's repertoire of services is not limited only to the petroleum industry. In recent years, OilCorp has managed to secure engineering, procurement construction and commissioning (EPCC) jobs relating to the power and sewerage industries.
  
  Of the total RM360 million of new jobs that OilCorp is currently bidding for, some RM221 million of it relates to the power industry.
  
  OilCorp, slated for a listing on the main board of the Kuala Lumpur Stock Exchange (KLSE), is targeting Aug 5, 2003 through a reverse takeover of financially troubled Abrar Corp Bhd.
  
  Construction based Abrar had in July 2002 signed an agreement to transfer its listing status on the KLSE main board to engineering, procurement and construction specialist OilCorp.
  
  As at March 31, 2000, Abrar had total liabilities of RM181.5 million and its shareholders' fund was in a deficit of RM164.8 million. It was not able to meet its financial obligations.
  
  Oilcorp has issued 1.6 million new OilCorp shares to the existing shareholders of Abrar on the basis of one new Oilcorp share for every twenty existing Abrar shares held.
  
  Abrar would then settle its debts to creditors by issuing 35 million new shares of OilCorp. Subsequently, OilCorp would acquire the entire equity interests in Oil-Line Engineering & Associates Sdn Bhd and Ascentland Sdn Bhd before assuming Abrar’s listing status.
  
  Therefore, what would the outlook be like for OilCorp once it takes over Abrar's listing status?
  
  Says an analyst from AmSecurities: “As the oil and gas industry in Malaysia is still growing, there is no shortage of fabrication jobs. We estimate that there is a total of some RM1.2 billion worth of jobs for fabrication of jackets and topsides in 2004 with another RM1.7 billion of onshore oil and gas projects,”
  
  What is interesting to note is that OilCorp gets many repeat orders from some of its big clients such as Petronas group of companies and Fluor Daniels International (M) Sdn Bhd.
  
  Going forward, with estimated engineering and procurement (E&P) of RM5.21 billion spent by Petronas Carigali Sdn Bhd in 2003, OilCorp does see itself as a beneficiary. After all, Petronas has recently reaffirmed its commitment to nurture local oil and gas service providers.
  
  Between 1998 and to date, the group has completed approximately 30 oil and gas and semiconductor projects on or ahead of schedule with recognition from clients.
  
  Its biggest project to date is a wafer fabrication project for Silterra Malaysia Sdn Bhd worth RM60 million. Its other notable clients include Malaysia Shipyard and Engineering Sdn Bhd and ESSO Production Malaysia Inc.
  
  “Currently, we have a market share of approximately 20 per cent in the on shore division, I believe we can increase this portion once we venture into the regional and international market,” says Ng.
  
  AmSecurities likes OilCorp because it is one of the few domestic players in the highly specialised field of provision of engineering, procurement, construction and commissioning (EPCC) services related to the oil and gas industry.
  
  OilCorp currently has jobs in hand worth RM100.3 million. Over the last five years, OilCorp has completed various jobs totalling RM243 million.
  
  Also, due to the specialised nature of many of the jobs handled by OilCorp, the company enjoys relatively lucrative margins. The analyst from AmSecurities has a group pre-tax margin forecast of 18.7 per cent for financial year (FY) 2003 and 12.7 per cent for FY04.
  
  Currently, OilCorp’s subsidiary, Oil-Line Engineering and Associates Sdn Bhd (Oil-Line), is exploring projects in Brunei. It is also bidding for jobs in Indonesia, Singapore and Vietnam.
  
  “OilCorp is planning to step up marketing efforts for the international and regional market to increase the business network in various countries of interest,” says Ng.
  
  Ng feels that his company's edge lies in its pool of skilled engineers available onshore and offshore. These are specialists who can be sourced both locally and regionally.
  
  “We have an added advantage in our 22-hectare one-stop integrated fabrication yard in Pulau Indah, Selangor. That will enable us to participate on more oil and gas projects,” says Ng.
  
  Upon the completion of this RM40 million project, it would be able to actively become one of the local players as fabricators of offshore structure and modules as well as opportunities to extend its business into shipbuilding and repairs, and also building power barges in the long term. This will help redistribute the business focus from onshore to both onshore and offshore.
  
  At the moment, Ng says that there are already many competitors in the onshore division. He feels that the Pulau Indah fabrication yard will act as a catalyst to kick off the company's offshore activities.
  
  The analyst, however, is slightly concerned with the poor visibility and high volatility of OilCorp's earnings. Currently, the nature of many of the jobs secured or tendered by OilCorp are very short term in duration. This puts the company in risk as the company may be exposed to fluctuations in its revenue stream if it does not secure new or similar jobs.
  
  In terms of revenue contribution, oil and gas contributes 80 to 90 per cent while property contributes the remaining 10-20 per cent.
  
  Its property development and resort operation division is represented by Ascentland, whose main business activity is the development of a first-of-its-kind in the country concept of a 9.2 hectare water paradise known as PD Tiara Bay Resort in Port Dickson. It is a freehold mixed development of residential, commercial and water theme park.
  
  Upon completion in early 2005, the project will comprise a man-made beach paradise with six Olympic-sized swimming pools, a water theme park with interactive water play systems and five-star resort facilities. The residential development will consist of more than 900 apartments.
  
  OilCorp group posted a proforma turnover of RM38.9 million for 2001. Last year, the proforma turnover amounted to RM79.5 million and Oilcorp is forecasting a proforma increase to RM120 million in December 2003. Consolidated profit after tax is forecasted at RM7.49 million. Net gearing for the group is around 0.4 times.
  
  At an offer price of RM1.10 per share, OilCorp would be one of the cheapest oil and gas companies in terms of price earnings ratio. The analyst from AmSecurities has a fair value of RM1.47 for the stock.

Back in 2004, the company tried to do a 1 for 2 stock split. However, it was rejected. See here

• We refer to the announcement dated 28 July 2004 where it was stated that Bursa Malaysia Securities Berhad ("Bursa Securities"), vide its letter dated 27 July 2004, did not approve the Proposed Share Split and the application for waiver for non-compliance with the Listing Requirements.

Sep 9th 2004.

• Thursday September 9, 2004
  Oilcorp bids for RM1b projects
  
  OILCORP Bhd is bidding for projects worth RM1bil, of which 70% to 80% are within the country, said managing director Sunny Ng.
  
  “We are going all out for oil and gas, petrochemicals and power plant projects so that we can generate recurring income. Oilcorp is aggressive in terms of securing tenders and projects,” he said after the company’s EGM in Shah Alam yesterday.
  
  The group provides engineering, procurement, construction and commissioning (EPCC) services to the oil and gas, petrochemicals, power generation and semiconductor industries.

Bidding for 1 Billion projects! And here's a clip of the Business Times version.

• Oilcorp targets RM1b projects
  By ZAIDI ISHAM ISMAIL
  
  OILCORP Bhd is going all out to secure RM1 billion worth of oil and gas, petrochemical, power plant and shipbuilding projects to ensure a continuous income stream.
  
  Managing director Sunny Ng Huat Tian said that up to 80 per cent of the projects will be locally-based, while the rest will be from overseas.
  
  “Oilcorp is aggressive in terms of securing tenders and projects,” Ng told reporters in Shah Alam, Selangor, yesterday. He declined to give details.

So how was OilCorp doing as a company?

25th Feb 2005. Quarterly rpt on consolidated results for the financial period ended 31/12/2004

It's fiscal year 2004 showed a net profit of some 15 million according to that quarterly earnings.

Not too bad, yes?

However, a month later 29th March 2005, came the bombshell. PRESS RELEASE ISSUED BY SECURITIES COMMISSION

And this was what the press reported.

• Tuesday March 29, 2005
  SC orders Oilcorp to re-state 2003 financial results
  
  THE Securities Commission (SC) has directed Oilcorp Bhd to re-issue its financial statements for the year ended Dec 31, 2003, including the 2002 comparative figures.
  
  The SC said in a statement yesterday the company had failed to comply with Regulation 4 of the Securities Industry Regulations 1999 on its treatment of non-elimination of profits arising from intra-group transactions.
  
  “This treatment is in breach of Financial Reporting Standard (FRS) 127 and has the effect of over-stating the consolidated revenue and profits of Oilcorp,” the commission added.
  
  In addition, Oilcorp had presented certain expenses as “extraordinary” in its income statement in breach of FRS 108.
  
  Consequently, the SC said, the company's presentation of its basic earnings per share before extraordinary items “is inappropriate.”
  
  Oilcorp had reported revenues of RM170.9mil and a net profit of RM15.3mil for 2003. The SC did not say by how much the company should re-state its revenue and earnings.

And reporter Errol Oh from Star Business made an in depth report on it.

• Saturday April 2, 2005
  Oilcorp has a lot to explain
  
  BY ERROL OH
  
  WHEN the Securities Commission (SC) announced last Monday that it had directed Oilcorp Bhd to reissue its 2003 accounts, the stock market's reaction was swift and predictable. The share price dived from that day's closing of 88 sen to 68 sen on Thursday, almost a 23% plunge.
  
  The SC said the move was because Oilcorp's consolidated financial statements had not been prepared in accordance with certain approved accounting standards.
  
  This sort of stern action by the authorities is not an everyday affair, and it spooked the Oilcorp shareholders. No longer sure about what they know about the company, they dumped the stock. Says a corporate sector observer, “How can something like this happen? Compliance with accounting standards is such a fundamental thing.”
  
  It is fundamental, yes, but it is hardly a simple matter. Financial reporting standards and disclosure requirements are increasingly more complex and exacting, and the investing community's scrutiny of the listed companies' accounts is getting more intense.
  
  In such an environment, slip-ups and misjudgements are more likely to occur. As recent events have shown, this is already happening in corporate Malaysia.
  
  On March 7, Goh Ban Huat Bhd said it had to amend its unaudited fourth-quarter results – thus reporting a net loss instead of a net profit originally – because the management misunderstood the accounting principles relating to the treatment of intra-group sale and purchase of assets.
  
  Days later, Supercomal Technologies Bhd amended its December quarterly results (first released on Feb 28) because of a few mistakes.
  
  In comparison, the Oilcorp case is far more sensational and has a deeper impact. The 2003 accounts had been audited and were tabled in an annual general meeting (AGM) last June. Now, the management must face the shareholders again, this time with the restated accounts and there may well be some hostility.
  
  Says SC deputy chief executive Datuk Zarinah Anwar, “They have to convene a general meeting specially to pass the new accounts, which means that the shareholders will know that the original accounts were false. This is where we expect shareholders to come out and take action.”
  
  There will indeed be a lot of explaining to do. OilCorp group managing director Sunny Ng did not return BizWeek's call. The company is expected to make an announcement through Bursa Malaysia this week, detailing the changes to its financial statements, and the reasons and effects.
  
  According to the SC statement, Oilcorp's 2003 accounts have two problems – one regarding profits from transactions between companies in the same group, and the other regarding an extraordinary items.
  
  The regulatory body says the company did not eliminate profits arising from intra-group transactions, which is a breach of Financial Reporting Standard (FRS) 127.
  
  The principle here is that when the accounts of a group of companies are consolidated, profits arising from dealings between companies within the group should be taken out because this is essentially money going from the left pocket to the right pocket.
  
  The SC points out that the non-elimination of the profits has the effect of overstating Oilcorp's consolidated revenue and profits. Insiders say the amount involved is a few million ringgit.
  
  What is interesting about this breach is that it is usually impossible to detect just from reading the published accounts. This indicates that the SC has been studying the Oilcorp case for some time and had been talking to the management.
  
  Here is an example of the work of the SC's market surveillance unit. Says commission chairman Datuk Md Nor Yusof, “It's more of a quiet, in-depth and behind-the-scenes study.”
  
  The probe may have been low-profile, but SC's follow-up on the outcome is meant to make people sit up and take notice. The press release and the directive to Oilcorp are clearly designed to strike fear and to serve as a warning to the management of listed companies.
  
  However, this tough approach does not address the problem that accounting standards are sometimes subject to interpretation.
  
  According to those familiar with the Oilcorp case, the bigger issue, by far, with the 2003 accounts is the treatment of the extraordinary items. And company insiders insist that this is not a clear-cut issue.
  
  Says the SC in its statement, “Oilcorp had also classified and presented certain expenses as Extraordinary in the income statement in breach of FRS 108. Consequently, the presentation of the company's Basic earnings per share before Extraordinary Items is inappropriate pursuant to FRS 133.”
  
  In the annual report, the income statement includes extraordinary items amounting to almost RM38mil. These refer to the write-off of “one-off corporate costs pursuant to corporate and restructuring scheme for transfer of listing status”.
  
  As the white knight for PN4 company Abrar Corp Bhd, Oilcorp was listed in place of Abrar in August 2003. According to insiders, of the RM38mil, RM35mil represented the listing premium of Abrar , that is, the price for Abrar's listing status.
  
  If the extraordinary items were reclassified, Oilcorp's operating profit of RM20.9mil for 2003 would become an operating loss. However, the restatement is not expected to alter the bottom line which is a net loss of RM25.6mil.
  
  Oilcorp's stand is that the expense has been correctly treated as an extraordinary item. Obviously, the SC has a different take on this. In this difference of opinions, the accounting standards may not be of much help.
  
  FRS 108 (titled “Net Profit or Loss for the Period, Fundamental Errors and Changes in Accounting Policies”) prescribes the classification, disclosure and accounting treatment of certain items in the income statement.
  
  It defines extraordinary items as “income or expenses that arise from events or transactions that are clearly distinct from the ordinary activities of the enterprise and, therefore, are not expected to recur frequently or regularly”.
  
  At the same time, FRS 108 says only on rare occasions does an event or transaction give rise to an extraordinary item. “It is possible to view such items as being external to managerial control and exhibiting a high degree of abnormality,” it adds.
  
  Says an official of an accounting body, “I tend to believe that there is no such thing as an extraordinary item. However, infrequent or unusual the item, it affects the company anyway.”
  
  This reflects the thinking in the global accounting fraternity. Beginning this year, the International Accounting Standards Board bars the separate classification of extraordinary items in the income statement.
  
  Nevertheless, at the time when Oilcorp prepared its 2003 accounts, the accounting standards still allowed extraordinary items. That may not matter anymore. The management has said it would comply with the SC's directive, which presumably means that it is no longer contesting the commission's interpretation of the standards.
  
  What is left now is for Oilcorp to convince the stock market that the reissue of the accounts is the result of honest mistakes. To some observers, the SC has struck a blow for market integrity and investor protection. The wisest way for Oilcorp to respond is to be transparent and to learn from the experience.

A less than transparent company. Don't you wonder about the earlier press statements about the billion dollar oil and gas projects it was bidding for?

So OilCorp restated its earnings.

• Tuesday April 26, 2005
  Oilcorp re-states 2003 financial results
  
  OILCORP Bhd has re-stated its financial results for the year ended Dec 31, 2003 to show a loss after tax of RM28.6mil instead of a profit after tax of RM14.7mil as reported previously.
  
  It told Bursa Malaysia yesterday that the Securities Commission (SC) reviewed its financial statements and noted the following reporting issues:
  
  . Non-elimination of certain intra group transactions;
  
  . Presentation of extraordinary items; and
  
  . Presentation of loss per share.
  
  The company said it has been in liaison with the SC and external auditors to resolve the issues.
  Other figures that Oilcorp have now re-stated include net loss, which should be RM29.6mil instead of a loss of RM25.6mil and loss per share of 31 sen instead of 26 sen.

Makes one wonder about OilCorp, yes?

But then incredibly, a change of 'fortune'.

10/10/2005. Offer to Lead the Formation of the Konsortium Perikanan Nasional Berhad (''KPNB'') by the Ministry of Agriculture and Agro-Based Industry (''MOA'')

And of course the share soared.

• Tuesday October 11, 2005
  
  Oilcorp to lead national fisheries project
  
  BY C.S. TAN
  
  SHARES in Oilcorp Bhd, which provides engineering services for the oil and gas industry, were actively traded as they rose 11 sen or 12% to RM1 yesterday. Some 12.6 million shares changed hands.
  
  This followed a rise of 29 sen in its share price last week.
  
  The company, in reply to a query from Bursa Malaysia on the unusual market activity, said it was not aware of any activity that may have contributed to that, other than a letter of offer from the government to lead the national fisheries project.
  
  Oilcorp said the letter from the Agriculture and Agro-based Industry Ministry was received last Saturday.
  
  The ministry offered Oilcorp to become a lead consortium member to spearhead the national fisheries project through Konsortium Perikanan Nasional Bhd or National Fisheries Consortium Bhd.

And what about the BILLION DOLLAR oil and gas projects? No more oil? Only fish? Fishy?

On 16th Feb 2007, OilCorp proposes yet again another share split! See the announcement here

An truly incredible nonsensical 1 for 10 share split!

What does the stock split do? Nothing? It does not change the value of the company and it definately does not improve the fundamentals of the company. It's simply a pathetic corporate strategy to attract investor!

And the most incredible thing was OilCorp was trading at 1.33!

Split the stock so that it can trade at 13 sen????

Truly nonsensical!

Yesterday, there was an news report on OilCorp's property development! Yes OilCorp has ventures into the property business too! (Where's the Oil dude?).

• D'Tiara's revenue may hit RM200m in 4 years
  By Roziana Hamsawi
  roziana@nstp.com.my
  
  July 16 2007
  
  OIL and gas support specialist Oilcorp Bhd expects its property subsidiary D'Tiara Corp Sdn Bhd's revenue to increase fivefold to RM200 million in four years.
  
  D'Tiara, which posted a revenue of some RM27 million last year, is confident that from 2011 onwards its revenue would be between RM150 million and RM200 million.
  
  D'Tiara is in discussion for a listing on the Alternative Investment Market (AIM) of the London Stock Exchange to raise funds for the projects.

LOL!!!

Same style. Optimistic projects and now even listing for AIM!

Wah! So good eh?

So how's OilCorp doing as a company?

25/5/2007 Quarterly rpt on consolidated results for the financial period ended 31/3/2007

Only a net profit of 5 million! Whatever happened to the billion dollar oil and gas projects and the fishery projects?

And if you read the balance sheet attached in the above quarterly earnings, OilCorp has only 7.5 million in its piggy bank, with a total loans of 247.248 million!

Does it look like a sound fundamental company to invest in???

Disclaimer:

Oh yeah.. in a hot share market, any share can go up! :P