KNM Group Bhd said the global oil price collapse is not likely to hurt its future earnings that much as its order book of RM5 billion will keep it busy for the next two years.
“We’re more of an onshore and downstream player. We’re not that much affected. In fact, we’re actively participating in the bidding of the remaining four packages at Pengerang,” said KNM chief financial officer Terence Tan.
Earlier this month, Petroliam Nasional Bhd (Petronas) announced a cut in next year’s capital expenditure since falling oil prices have slashed its earnings. The national oil company, however, remains committed to the execution of jobs awarded in Pengerang, Johor.
The US$27 billion (RM94 billion) Pengerang Integrated Complex is made up of the Refinery and Petrochemical Integrated Development (Rapid) complex and co-generation plant, re-gasification terminal 2, air separation unit, raw water supply project as well as crude and product tanks.
Four months ago, Petronas, via its unit PRPC Refinery and Cracker Sdn Bhd, awarded Sinopec Engineering a US$1.33 billion contract which entails one package of an oil refining and petrochemical integrated engineering project at Pengerang.
“We’ve been selected the subcontractor to Sinopec to execute this contract. Work is underway,” Tan told reporters after the company’s shareholders’ meeting, here, yesterday.
He also noted that KNM is still seeking to secure a £100 million (RM544 million) loan for the long-awaited Energy Park Peterborough waste-to-energy project in the United Kingdom.
KNM owns 80 per cent of the project, while the developer, Peterborough Renewable Energy, owns the remaning 20 per cent.
Tan said the UK authorities are conducting financing and technical due diligence.
“We’ve achieved various milestones in securing this planning consent. The fulfilment of conditions are underway. We’re hopeful of positive results in three months.”
A year ago, KNM borrowed €220 million (RM939 million) from UniCredit Bank AG, UniCredit Luxembourg S.A. and other participating European financial institutions to buy German-based Borsig AG, a leader in process heat exchangers in Europe. It was also reported that KNM had wanted to list Borsig on the Singapore stock exchange.
“Since we’ve managed to secure this loan from UniCredit Bank, we’re not in a hurry to list Borsig. Timing is of essence. In view of the current lacklustre sentiment, we’re not likely to get the valuation Borsig deserves,” Tan said.