KUALA LUMPUR May 4 Malaysian offshore drilling
services firm UMW Oil & Gas Corp Bhd (UMW-OG) scrapped
plans on Thursday to acquire offshore support vessel provider
Icon Offshore Bhd, citing capital constraints and
uncertainties in the industry.
UMW-OG said in January it planned to buy Icon in a deal
valuing the target at 588.6 million ringgit ($136.06 million).
It had also said it planned to buy 95.5 percent of Orkim Sdn
Bhd, an operator of clean petroleum product transport vessels
which it then valued at 495 million ringgit.
But UMW-OG said it was terminating the deal "after
considering the significant capital requirements of UMW-OG and
upon taking into account the need to have greater clarity on the
industry consolidation framework and certainty of the industry
environment before any such consolidation can be pursued."
The firm said in a statement it would explore opportunities
to collaborate in the future as it continued to believe that the
creation of a major integrated oil and gas service provider was
the right strategic approach for the longer term.
UMW-OG said it would now pursue a plan to recapitalise.
Last year, analysts had raised concern about UMW-OG's high
gearing levels. The company has since restructured a large
portion of its short-term debt into long-term debt and has
received a 308 million ringgit cash injection from its parent.
The Malaysia's energy sector and the industry worldwide has
been hit by a slide in oil prices.
($1 = 4.3260 ringgit)
(Reporting by Liz Lee; Editing by Edmund Blair)