Capital markets executive summary | Tue 10 Oct 2023

Capital markets executive summary | Tue 10 Oct 2023

Petronas Chemicals is building Asia’s largest plastics recycling plant in Pengerang

Petronas Chemicals Group Bhd (PCG) reached a final investment decision for the advanced chemical recycling plant with a capacity of 33k tonnes per annum. The project, which will commence operations in 1H2026, should contribute to a sustainable plastics ecosystem by converting end-of-life plastics into pyrolysis oil or tacoil for used as substitute feedstock in producing food-grade sustainable plastics. It will help Malaysia phase out single-use plastic in line with the Plastic Sustainability Roadmap 2021-2030, and at the same time meet the growing demand from major brands for sustainable packaging. PCG signed a technology licence agreement with London-based Plastic Energy Ltd, which will provide the chemical recycling technology through a patented process that heats mixed post-consumer plastic waste in the absence of oxygen. The hydrocarbon vapours are condensed into pyrolysis oil. The engineering, procurement and construction contract was awarded to Mutiara Etnik Sdn Bhd. The counter closed at RM7.17.

Alliance Bank buys Oxley’s 24-storey tower for new headquarters

Alliance Bank Malaysia Bhd is acquiring the property in Jalan Ampang, which was developed by Oxley Rising Sdn Bhd, a subsidiary of Singapore’s Oxley Holdings Ltd, for RM405.84m. The property within Oxley’s 3.11-acre development in Jalan Ampang includes office suites from Levels 6-29 with 315,711 sq ft of floor space within Tower 3 plus 2 duplex retail units on the ground and 1st floors and 2 retail units on the ground floor of a 2-storey podium measuring 9,569 sq ft total floor area. Oxley bought the land for RM446.7m in 2014. The acquisition will be funded via the capital markets and internal funds. The bank, currently based in Menara Multi-Purpose in Capital Square, will be moving into the new building after the acquisition is completed in Nov 2024. Apart from the dedicated building named after the bank at the commercial centre of KLCC that will improve the bank’s visibility and branding, the green-certified building is in line with the bank’s sustainability journey. The staff will also enjoy a fresh working environment with better amenities. The counter closed at RM3.34.
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Government guarantee for LTAT to obtain RM2b buyout loan

The finance ministry agreed to provide the guarantee so that the Armed Forces Fund Board (LTAT) can secure the loan which it needs in order to finance a general offer at RM1.55 per Boustead Plantations Bhd share. LTAT already owns 68.01% and will have to pay RM1.11b for the balance 716.66m shares. It claims that the privatisation of Boustead Plantations is necessary in order to deal with Boustead group’s debts totalling RM6.8b. Wholly-owned Boustead Holdings Bhd’s short-term debt obligations include settling RM159m revolving credit, redeeming RM607m perpetual sukuk and repaying RM1.65b Islamic medium term notes. Boustead Plantations closed at RM1.40.

HSBC buys Citigroup’s China retail wealth management portfolio

HSBC Holdings plc is acquiring the mainland China portfolio, which consists of USD3.6b (RM17b) in assets and deposits from wealth customers in 11 major cities. It excludes credit cards, mortgages and other loans of Citi China. The deal will close in 1H2024. In HSBC’s pivot to Asia strategy, mainland China is central to its ambition to be the leading wealth manager in Asia, one of the world’s fastest growing wealth markets. It plans to deepen coverage of mainland China wealth customers by concentrating on affluent and emerging affluent sectors. Hong Kong is already HSBC’s largest market, and it recently bought the remaining 50% of HSBC Life China and launched private banking initiatives in 6 mainland China cities. In Dec 2022, Citigroup announced that it is winding down on consumer banking in China.

GIC and INA consortiums fight for Jasamarga Transjawa Tol shares

PT Jasamarga Transjawa Tol, which was established in 2017, operates toll roads in West Java, Central Java and East Java. Parent Jasa Marga, 70% owned by the Indonesian government, had planned to list the company in Jakarta in 2023. Instead, the company decided on a private placement of 35% of Jasamarga Transjawa Tol to a strategic investor. A consortium led by Singapore’s GIC Pte Ltd, another consortium led by Indonesia Investment Authority and other interested parties are the final bidders and are in advanced discussions. Jasa Marga could raise USD750m (RM3.55b) from the sale. Jasa Marga was founded in 1978 and is the 1st and largest toll road operator in Indonesia with 35 concessions and total road length of 1,809km.