PETALING JAYA – The two principal owners of Kencana Capital Sdn Bhd – Tan Sri Mokhzani Mahathir and Datuk Yeow Kheng Chew, better known as KC Yeow – are splitting their business interests in the investment holding company as part of a large scale restructuring exercise.
Part of the reshuffle involves the buyout of Yeow’s stake in Kencana Capital.
In turn, he is acquiring Kencana’s stake in Yinson Holdings Bhd. The swap essentially means that Mokhzani will end up as the sole owner of Kencana following the restructuring.
Yeow now holds 14% of Yinson, a company that operates floating production, storage and offloading (FPSO) vessels catering to the oil and gas (O&G) industry.
Mokhzani confirmed this restructuring when contacted by StarBiz.
“We are divvying up Kencana’s investments, as we have different priorities going forward.
“It is actually a plan that we had since 2012 but was put on hold after the economic slide,” he said.
Stock exchange data yesterday revealed that 119.71 million Yinson shares changed hands in an off-market transaction, representing a 10.95% stake in the offshore services provider. Bursa Malaysia filings by Yinson yesterday revealed that Yeow had acquired this block as well as another 33 million shares in Yinson, which were distributed to him by Kencana Capital by way of a dividend in specie. This gives Yeow a 14% stake in Yinson, making him the second-largest shareholder in the company after Yinson’s founder and chairman, Lim Han Weng, who owns 21%.
The shares crossed yesterday at RM3.07 apiece, which was at a discount to Yinson’s closing price of RM3.19.
Yinson also said that Mokhzani and Kencana had ceased to be substantial shareholders in the company following the disposal of a total of 153.37 million shares.
This marks Kencana’s exit from the O&G business after a five-year period marked by extreme highs and lows.
Kencana had emerged as a substantial shareholder of Yinson in June 2013, after subscribing to a new placement exercise. The company subsequently became a major FPSO player with an orderbook of more than RM16bil as at last year.
Mokhzani and Yeow’s first major venture into the O&G sector was through Kencana Petroleum Bhd. In 2011, the company struck a notable merger with SapuraCrest Petroleum Bhd in a massive RM12bil deal, which was one of the largest in the history of corporate Malaysia.
This resulted in the creation of integrated offshore services firm SapuraKencana Petroleum Bhd (SapKen), which was successfully listed on Bursa Malaysia in May 2012.
Notably, in July this year, Yeow, a former executive director of Kencana Petroleum, and two others were charged with insider trading in relation to the 2011 merger of Kencana Petroleum and SapuraCrest in 2011.
In February 2014, four months before the collapse of crude oil prices, Mokhzani and Yeow (who held their SapKen block through a vehicle called Khasera Baru Sdn Bhd) sold 190.3 million shares in SapKen at a price of RM4.30 apiece.
This gave them proceeds of a RM820mil.
SapKen shares have lost more than half that value since then. Mokhzani and Yeow left the board of SapKen last year, although their vehicle Khasera Baru still holds a balance 10% stake in SapKen. Despite the difficulties in the industry, Yinson’s shares have actually outperformed the broader market this year, making it one of the few O&G counters with a positive return. To date, its shares have gained 8.87%.