IJM Corporation Bhd expects the proposed 25.08 per cent stake acquisition in Scomi Group Bhd to be completed by year-end Executive Deputy Chairman Tan Sri Krishnan Tan Boon Seng said today.

He said Scomi had already given IJM the placement shares and after certain regulatory approvals, the proposal will be brought to the shareholders of both companies.

"Based on the timeline given, it should be by end of this year," he told reporters after the company's extraordinary general meeting today.

Tan said IJM's Board of Directors fully backed the proposed acquisition, which makes the conglomerate as the single largest shareholder in Scomi.

"They believe it will allow the construction giant to have a good entry into the oil and gas sector without having to start from the zero base.

"The oil and sas sector is a whole range of business which involves tremendous level of activities. Our speciliaty is on the civil side, while Scomi has a very good track record in areas such as marine drilling waste management and marine logistics.

"So, it is an easier task to take the company rather than any kind of joint ventures. Scomi provides added value to IJM's existing businesses as it has a good track record, a good management team and technology," he added.

IJM had last month announced it was taking up 25.08 per cent stake in Scomi for a cash consideration of RM149.3 million via subscription of 119.1 million new shares or 10 per cent of Scomi for RM39.3 million cash; and new Scomi redeemable convertible secured bonds with an aggregate nominal of RM110 million in cash.

Tan said IJM's first intention after acquiring Scomi is to expand in what "they (Scomi) are already good at, and then look at the other side of the businesses."

He said the management of IJM and Scomi will collaborate and look at ways to add value to each other.

Asked on Scomi's financial woes, Tan said: "It has now gone to a position. Scomi is now on a turning around the verge. If you see for the last six months, Scomi has been making money while increasing their orderbook.

"IJM believes the difficult period for Scomi is over. Thus, we thought we should ride on in the turning around process," he said.

Tan also said IJM has nominated a representative to sit on the Board of every Scomi's subsidiary and the process is expected to take place very soon.

On Scomi's monorail business, Tan said there is potentially a bigger role to be played by IJM in the business, to complement Scomi's successful track record.

"If you look at the international market for the business, the competitive edge for Scomi lies in getting a very strong local contractor in the countries in which they want to execute the project.

"They also have a very good track record in doing projects in high-density areas, places with heavy goods and passengers' movements and high-risk areas.

"Monorail business is not only about selling the cars. Thus, it provides a bigger potential for IJM as a group," he added.
Scomi is one of the world's leading providers of oilfield drilling fluids solutions and drilling waste management services.

It is also a leading supplier of monorails through the Scomi Rail subsidiary.

Listed companies under the Scomi Group are Scomi Marine Bhd and Scomi Engineering Bhd. -- BERNAMA