More to come from AK?

MUCH has been taking place in the stable of companies belonging to low-profile tycoon T. Ananda Krishnan.

This week, Ananda or AK as he is popularly known, has been in the news for the sale of his Tropical Islands Resort in Krausnick, Germany, for € 226mil or RM1.07bil. This sparked talk that more corporate exercises involving companies he controls may be in the offing. Most of his Malaysian assets are under stress, not unlike the plethora of Bursa Malaysia-listed stocks in the same predicament.

Top of the list is Bumi Armada Bhd, the ailing oil and gas services provider which at its height some four years ago commanded a market capitalisation of close to RM12bil. Today, the stock has been battered down to a mere 18 sen, giving it a market cap of RM1.05bil. The shadow of a US$500mil debt that needs to be refinanced by early next year hangs over it.

Bumi Armada has ruled out a cash call, so that’s not the route being considered. Privatisation may be an option, logically speaking.

Another company in his stable, Astro Malaysia Holdings Bhd, has shed close to half its value, while Maxis Bhd is down by some 12% year-to-date.

A few months ago, there was speculation of a merger between Maxis and Astro. Analysts say it is a rational option in view of intense market competition, more so with Astro, which no longer has the monopoly for paid television broadcasting services. The move would also be in line with the global trend of amalgamation of content and connection providers. Privatisations of both stocks are also a possibility.

The 80-year-old tycoon is not new to asset-rationalisation exer- cises involving capital market moves.

Could he be taking a closer look at his Malaysian assets?

In India, wireless operator Aircel Ltd, which he controls, filed for bankruptcy protection this year.

The RM1bil from the sale of the German Tropical Islands Resort may seem like a lot of money but is not if investments and the time spent on the project are taken into account. The say in tough times, only the strong survive. There is hardly any doubt among Ananda’s followers that he belongs to that category of businessmen.

Still, it is an uphill task to create value for the beleaguered Bumi Armada and Astro.