KUALA LUMPUR: Weststar Aviation Services Sdn Bhd (WAS), in which the world’s largest private equity firm KKR & Co owns a significant minority interest, is planning for growth outside Malaysia.
The helicopter services provider plans to bid for aviation contracts serving offshore and onshore oil and gas (O&G) projects in Southeast Asia, Africa, Middle East and South America, said The Weststar Group founder and group managing director Tan Sri Dr Syed Azman Syed Ibrahim.
“We have to acknowledge that the growth in the O&G sector in Malaysia is somewhat limited and that it’s only natural for us to explore and expand our operations beyond the Malaysian shores.
“We have established a foothold in Africa over the last three to four years by investing in project bases with infrastructure and manpower ready to serve the current and future potential markets.
“We are currently bidding for contracts in Congo and Cameroon, to name a few,” Syed Azman told Business Times in an interview, here, recently.
He said WAS was also seeking to expand its business in Thailand and penetrate new markets in Indonesia, Myanmar, Vietnam and Saudi Arabia.
Syed Azman sees Indonesia, Myanmar and Thailand as key growth countries in Southeast Asia and important to the company’s long-term global strategy.
“We have three helicopters parked in Indonesia and the aim is to tap the markets in Sumatra, Balikpapan and Surabaya. We envisage growth, especially in Balikpapan and Surabaya, which could accommodate up to nine and five helicopters, respectively, in the current economic climate.
“This is mainly to serve offshore O&G operators in those regions. There are other areas of growth, such as in the plantation and mining sectors, but we prefer to focus on the O&G industry for now,” Syed Azman said.
WAS is now a significant offshore helicopter service provider in Thailand, thanks to its partnership with United Offshore Aviation, the offshore aviation arm of the Nathalin Group of Co.
Nathalin is one of the largest transportation and energy groups in Thailand with business interests
in marine transport, green energy and ship management, among others.
The company is currently serving a seven-year PTT Exploration and Production contract that started in February 2014, with an option for a two-year extension.
The contract utilises six Agusta Westland AW139 helicopters and employs more than 140 employees.
WAS has been catering to the O&G industry in Malaysia since 2008.
Its biggest breakthrough was when the company won a multi-billion dollar contract in early 2011 to provide O&G rotary wing services to five international O&G firms.
The 10+5-year contract was the single largest job ever awarded in the Malaysian helicopter O&G support services sector.
By 2013, WAS became the largest offshore helicopter transportation services provider in Southeast Asia, with operations in five countries — Malaysia, Thailand, Indonesia, Morocco and Mauritania.
It operates from its bases in Kota Baru, Kerteh, Kuala Terengganu and Kota Kinabalu in Malaysia, as well as Balikpapan and Jakarta (Indonesia), Nouakchott (Mauritania), Songkhla (Thailand) and Agadir (Morocco).
Each base typically has hangar facilities, engineering control, radio and flight planning rooms, as well as maintenance workshops.
In 2013, KKR & Co bought a significant minority stake in WAS for RM642 million. The stake purchase is the first investment in Malaysia by the New York-based company, which is run by Henry Kravis and George Roberts.
KKR typically invests in businesses with attractive growth prospects, leading market positions and the ability to generate high returns on investments. Those companies in which it invests are often in transition stage — positioned for new growth or in need of reorganisation or enhanced focus.
“KKR is a strategic investor in WAS. It would have considered numerous factors, including WAS’s business and ability to sustain growth.
“When WAS first started, it operated only in Malaysia. We are now in five countries and still growing. We are constantly exploring new markets and expanding our fleet.
“That is why KKR came in... because the company sees growth in us,” said Syed Azman.
WAS harbours hopes of listing on the Main Market of Bursa Malaysia some day, subject to market conditions.
The aim of the listing was to raise fresh capital and further enhance the company’s profile, he said.
The current weak local equity market and a more than 60 per cent decline in global crude oil prices in the past year have hurt investors sentiment in Malaysia, a major producer of crude oil, natural gas and palm oil.
Many companies have delayed their initial public offerings and other fund-raising exercises.