“Orkim did very well last year. We continue to be open to explore any deals involving our portfolio companies, especially those that we have invested (in) over a period of time,” said CEO Syed Yasir Arafat Syed Abd Kadir today.
He was responding to media questions regarding the fund’s intentions, if any, to sell Orkim at Ekuinas’ release of results for the year ended Dec 31, 2022.
Bloomberg reported last week that Ekuinas was mulling the sale of Orkim and was seeking as much as RM1.5 billion, according to people with knowledge of the matter.
The shipping outfit has drawn interest from companies in the industry and financial sponsors, said the unnamed sources.
Orkim started as a shipbroker in 2004 and became a ship owner five years later after taking delivery of its first vessel, according to its website. Ekuinas bought the 95.5% stake in Orkim in 2014.
It has a fleet of 18 vessels with an average age of 10 years, and total tonnage of 153,637 deadweight tonnes.
Orkim is the only company in Malaysia to secure long-term contracts from state-owned oil corporation Petroliam Nasional Bhd (Petronas) and Shell Plc for clean petroleum products’ domestic sea transportation.
Other exits in the pipeline?
Meanwhile, Ekuinas also appears to be contemplating an exit from Al-Ikhsan, Malaysia’s leading sports retailer.
“We are open. In fact, we are having discussions about whether to exit Al-Ikhsan this year,” confirmed Arafat.
Ekuinas would explore the available options, such as a trade sale, depending on the valuation of the company.
Last year, another portfolio company Icon Offshore Bhd offloaded a jack-up rig to Saudi Arabia-based ADES Arabia Holding for RM381.65 million.
The disposal consideration of RM381.65 million is double the RM177 million it spent to purchase the jack-up rig from Perisai Petroleum Teknologi Bhd in October 2020.
For the financial year ended Dec 31, 2022, Main Market-listed Icon posted a net profit of RM171.6 million, up over 600% from RM22.7 million the year before.
Arafat added that Icon’s performance benefitted from the decision taken by Ekuinas to acquire the oil rig in 2020.
Icon Offshore, Al-Ikhsan and Medispec are amongst the portfolio companies credited with contributing to the growth in gross portfolio returns (GPR) for Ekuinas’ direct funds tranche 2 and tranche 3.
Specifically, Orkim was a main driver for tranche 2, whilst Icon Offshore and Al-Ikhsan contributed to tranche 3 fund returns.
Ekuinas recorded a GPR of RM716.6 million for its direct fund tranche 2, and RM133.5 million for tranche 3.