MAYBANK Investment Bank Research (Maybank IB) does not rule out an injection of port assets by MMC Corp into NCB Holdings Bhd after its purchase of a 15.7 per cent stake in NCB for RM222 million.
The research house said the transaction, which was traded off-market and will be completed by next Monday, would not be meaningful if it was just for an associate stake.
The port assets that could be injected in NCB are Johor Port, Port of Tanjung Pelepas (PTP) under MMC and Penang Port under MMC’s major shareholder Tan Sri Syed Mokhtar Albukhary.
As Permodalan Nasional Bhd (PNB) holds the majority 47.7 per cent stake in NCB, the asset injection, if it were to happen, would need PNB’s approval.
“We see a positive investment
case for the exercise as Northport has been struggling on falling volumes and additional higher quality ports will revitalise NCB,” said Maybank IB.
The research house said in a note yesterday that assuming only Johor Port and PTP were injected into NCB, at one time FY13 price-to-book-value (P/BV), and the injection to be satisfied via the issuance of new NCB shares at RM3 a share, MMC would see its stake in NCB increasing to 70 per cent.
This would lead to a general offer for the remaining shares.
Meanwhile, PNB’s stake will be diluted to 17 per cent, it added.
“We have raised our target price for NCB to RM3 from RM2.25.
“The potential injection of high quality port assets will improve earnings and growth,” said Maybank IB.