SHAH ALAM (May 25): Conglomerate UMW Holdings Bhd is facing increasing pressure to find a buyer for its 16 non-listed oil and gas (O&G) assets, as it refocuses its growth trajectory on three core sectors — automotive, equipment and manufacturing engineering.

The group's O&G segment's pre-tax loss widened to RM104.9 million in the first quarter ended March 31, 2017 (1QFY17) compared with RM68.4 million in 1QFY16, on lower revenue.

"The timeline is very tight. Any delay is due to finding the right price," UMW group chief executive officer Badrul Feisal Abdul Rahim told reporters after the group's annual general meeting today.

He added that the demerger of associate UMW Oil & Gas Corp Bhd (UMW-OG) is expected to "crystallise" by late July this year.

On the 16 non-listed O&G assets still slated for disposal, Badrul Feisal said UMW is "very much active" in negotiations with potential buyers.

"Our KPI (key performance indicator) is to do away with as many (of these O&G assets) as possible in 2017," he said, adding that the group is hopeful it can strike a few deals over the next two months.

The proposed demerger of UMW-OG from UMW and the sale of its non-listed O&G assets are expected to bring down its gearing to 0.54 times from 0.92 times currently, Badrul Feisal added.

Meanwhile, Badrul Feisal stressed the need for UMW's new RM1.8 billion plant at the Bukit Raja Industrial Estate in Klang, Selangor, slated for completion in 2019, to grow its auto division, particularly in the assembly of Toyota cars. The plant will have a full capacity of 100,000 units.

On the subject of China-based Zhejiang Geely Holding Group Co Ltd's purchase of a 49.9% stake in Proton Holdings Bhd, he said Proton has always been a "good competitor" and expects an increase in competition from Geely's entry into the local market.

At 3.04pm, UMW shares were trading 5 sen or 0.84% higher at RM5.97, with a market capitalisation of RM6.94 billion.