Wednesday, September 29, 2010

Wan Ariff gets loan for logistics takeover

By Habhajan Singh

Corporate figure Datuk Wan Ariff Wan Hamzah is all set to take control of Integrated Logistics Bhd's (ILB) local operations after securing the necessary financing from a local bank. Wan Ariff's outfit in the RM170 million takeover has secured loans totalling some RM70 million and is now prepared to assume control of the logistic company after earlier forking out some RM30 million cash.

"He has also been able to get Lembaga Tabung Haji (TH) behind him. Their presence in the deal, at the moment, is more of enabling Wan Ariff to take the deal through," one sources familiar with the deal told The Malaysian Reserve.

It is not clear at this moment whether TH, the local pilgrimage fund, is also pumping in money into the venture spearheaded by Wan Ariff, formerly part owner of privatised oil and gas services provider, Bumi Armada Bhd, along with business partner, billionaire T Ananda Krishnan.

Wan Ariff sold his stake in Bumi Armada and acquired Syarikat Borcos Shipping Sdn Bhd, which he has since sold a 40% stake to Sarawak-based Dayang Enterprise Holdings Bhd for about RM132 million last December.

In mid-February, ILB told the exchange it had received an offer for the takeover of its local logistics business for RM170 million.

On March 12, ILB announced that it had agreed to dispose of its Malaysian operations to AWH Equity Holdings Sdn Bhd for RM170 million in cash. The deal will see AWH, controlled by Wan Ariff, taking over ILB's wholly-owned unit, Integrated Logistics Solutions Sdn Bhd (ILSSB), and its wholly-owned unit, Integrated Warehouse Sdn Bhd, and M I Logistics Sdn Bhd.

The RM170 million in consideration includes the transfer of some RM141 million in ILSSB debts to ILB. AWH is jointly owned by Wan Ariff (70%) and Sidqi Ahmad Said Ahmad (30%).

Since Wan Ariff came into the picture, it is understood that ILB's local logistics business had been operating on a business as usual basis.

"It has been some six months. The business has suffered a little, simply because they could not go into an expansion mode due to the deal in the pipeline," said another source familiar with the company.

On March 15, sources had told The Malaysian Reserve that ILB's margin in its Malaysian operations had been slipping over the years, while the margins it was getting for its operations in China had been getting better.

(The Malaysian Reserve, 30 September 2010)

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