Dialog takes full control of CTSB
O&G company to pay RM193mil for remaining 45% stake
PETALING JAYA: Oil and gas (O&G) company Dialog Group Bhd is taking full control of its tank farm and terminal facilities business in Tanjung Langsat, Johor.
The company, in a filing with Bursa Malaysia yesterday, said it would pay a total of RM193mil to MISC Bhd for the 45% stake in Centralised Terminals Sdn Bhd (CTSB) it did not already own.
MISC, in a separate filing, said it was looking to exit the business to focus on its core energy shipping operations.
CTSB owns an 80% equity interest in Langsat Terminal (One) Sdn Bhd (LGT 1) and Langsat Terminal (Two) Sdn Bhd (LGT 2). LGT 1 and LGT 2, with a total storage capacity of 647,000 cubic metres, have been operational since 2009 and are currently fully utilised on term contracts.
“Full ownership would allow control and enhance accelerated decision-making to align CTSB to Dialog’s strategic direction, as well as to facilitate future expansion by CTSB,” the company said.
Under the deal, Dialog will pay RM137mil for the 45% equity stake. It will also repay MISC and take over its portion of shareholders’ loan to CTSB, including the principal and accrued interest, amounting to RM56mil.
Upon completion of the proposed acquisition, CTSB will become a wholly owned subsidiary of Dialog.
This will enable Dialog to incorporate and consolidate CTSB’s contribution into the group revenue and benefit from higher profit after tax from the additional 45% ownership in CTSB.
Both terminals are part of the storage and trading hub for O&G in Johor and are also within vicinity to one of the largest refining and petrochemicals, trading and storage centres in Asia. The LGT 1 and LGT 2 terminals have been included by oil agency Platts for its FOB Straits oil price assessment process.
In addition to current terminals owned by CTSB, Dialog has ownership of tank terminals in the Pengerang Deepwater Terminal (PDT) and Kertih Terminal.
“Together with the potential expansion of Langsat Terminal and the development of Phase 3 and future phases of the PDT, the proposed acquisition is in line with Dialog’s strategy to grow sustainable and recurring income, thereby further enhancing shareholders’ value in the long term,” it said.
Meanwhile, in a separate announcement, MISC said it expects to complete the deal within a month.
“The proposed disposal is in line with MISC’s initiative to divest its non-core tank terminal business, unlock the value of MISC’s investment in CTSB and focus on its core business in energy-related maritime solutions and services,” it said.