Corporate Milestones Description

Signed-Joint

Signed Joint Venture Agreement and Power Purchase Agreement Term Sheet for Malaysian Phosphate Additives (Sarawak) Sdn Bhd to build and operate an Integrated Phosphate Plant in Samalaju

/in /by

There is growing demand for phosphorus, an essential base nutrient widely used in food, feed and fertiliser products. CMS had joined forces to build an integrated phosphate complex at Samalaju at a projected cost of RM1.04 billion. On the last day of 2013, Samalaju Industries Sdn Bhd entered a shareholders’ agreement with Malaysian Phosphate Venture Sdn Bhd (MPV) and Arif Enigma Sdn Bhd (AESB) to form a joint venture company called Malaysian Phosphate Additives (Sarawak) Sdn Bhd (MPAS). Samalaju Industries Sdn Bhd and MPV will each own 40% of MPAS while AESB will own 20%. On 8 January 2014, MPAS signed a Power Purchase Agreement (PPA) with Sarawak Energy Berhad for the supply of 150 MW of electricity

The complex is the first of its kind in Malaysia and indeed Southeast Asia, and is the first non-metal or alloy-based plant in Samalaju Industrial Park (SIP), taking SCORE and CMS into a dynamic new industrial sector that offers long-term sustainable demand growth. The complex will have an annual production capacity of 500,000 tonnes of food and feed phosphate and related products such as fertiliser phosphate derivatives. It will be built on a 142- hectare site near the Samalaju deep water port, which is under construction. Construction started in the first quarter of 2014 and the complex is expected to be operational by 2017, and fully commissioned in 2018. Nearly 1,000 skilled workers and staff will be employed.

Signed-Power

Signed Power Purchase Agreement and Joint Venture Agreement for OM Materials (Sarawak) Sdn Bhd to build and operate a Ferrosilicon and Manganese Ferroalloys Smelter

/in /by

In 2011, CMS announced that it was exploring investment in ferrosilicon and manganese smelting at the Samalaju Industrial Park (SIP). Later, CMS’ wholly owned subsidiary Samalaju Industries Sdn Bhd signed a Memorandum of Understanding (MoU) with OM Materials (S) Pte Ltd (OMS), a wholly owned subsidiary of OM Holdings Ltd (OMH), one of the world’s largest manganese ore producers, which is listed on the Australian Stock Exchange (ASX). This related to the proposal to develop an approximate USD592 million smelting plant capable of producing 600,000 MT of manganese and ferrosilicon per year. In 2012, then Chief Minister Tun Pehin Sri Haji Abdul Taib Mahmud officiated at the signing ceremony of the joint venture. Formed in 2013, CMS Group has a 20% equity stake in OM Materials Sarawak and OM Materials Samalaju while the remaining 80% is owned by OMH. In March that year, OM Sarawak secured full funding for its ferrosilicon production facility (Phase 1) with the sealing of a financing facility worth USD315 million (RM970 million) with four local and foreign lenders. The banks were the Export-Import Bank of Malaysia Bhd, RHB Bank Bhd, Standard Chartered Bank Malaysia and Malayan Banking Bhd. Standard Chartered is OM Sarawak’s financial advisor in the smelting project. OMH announced to the ASX that capital expenditure on Phase 1 was estimated to be USD397 million. As part of OM Sarawak’s obligations under the power purchase agreement with Syarikat Sesco Bhd, a unit of Sarawak Energy Bhd, it has issued Sesco with a performance and payment guarantee and Sesco will supply 500 MW (per annum) to OM Sarawak for 20 years.

Re-acquired CMS Roads

Re-acquired CMS Roads Sdn Bhd and CMS Pavement Tech Sdn Bhd

/in /by

On 4 May 2011, CMS held an extraordinary general meeting (EGM) at the Riverside Majestic Hotel in Kuching to seek approval for the re-acquisition of both CMS Roads Sdn Bhd and CMS Pavement Tech Sdn Bhd from Putrajaya Perdana Bhd. After months of negotiations and discussions by numerous consultants, financiers and CMS management teams, the EGM took less than 10 minutes to convene and made a unanimous decision in approving the proposal.

Two days later, the re-acquisition exercise of the companies by wholly owned CMS subsidiary CMS Works Sdn Bhd from Putrajaya Perdana Bhd for RM82 million was completed. In addition to having a positive impact on CMS’ earnings, the acquisition returned additional expertise in road construction and road maintenance to CMS, enabling it to maximise potential earnings by securing more infrastructure-related projects.

Ceased-Operations

Ceased Operations of loss making IT companies

/in /by

CMS realised that its momentum would be better maintained without involvement in this aspect of the information, communication and technology (ICT) sector. It had originally entered into a share sale agreement with local information technology company I-Systems Group Bhd in early 2005 for the acquisition of shares amounting to just over RM18 million, representing a 51% equity interest in the MSC-status company. It was thought at the time that this would strengthen CMS’ foray into the ICT sector by leveraging on I-System Group Bhd’s experienced R&D team, capabilities in developing and marketing, and cross-selling of new products. However, this did not turn out to be the case. So, in 2010, CMS made the difficult decision to cease the operations of its technology subsidiary, CMS I-Systems Berhad, which had incurred considerable losses for some time. The subsidiary’s employees were retrenched with compensation and parts of its business sold off.

Disposed-off-UBG

Disposal of UBG Bhd

/in /by

Disposed-off-UBGIn order to focus more clearly on its key businesses, CMS sought to dispose of its stake in Utama Banking Group (UBG). Before doing so however, in May 2009 UBG disposed of CMS Roads Sdn Bhd and CMS Pavement Tech Sdn Bhd to its listed subsidiary Putrajaya Perdana Bhd. On 29 December 2009, it was announced that Petro Saudi International Ltd, a privately owned investment holding company with its headquarters in Saudi Arabia, proposed to acquire CMS’ stake in UBG. The transaction was completed in September 2010. CMS’ 37.21% stake in UBG, which it held through its wholly owned subsidiary Concordance Holdings Sdn Bhd and PPES Works (Sarawak) Sdn Bhd, (in which it held a 51% stake), realised an immediate cash return for CMS and its subsidiaries of more than RM465 million.