KUALA LUMPUR: Dayang Enterprise Holdings Bhd is seeking to privatise its 29.88%-owned unit Perdana Petroleum Bhd after the two companies sought suspension from trading yesterday, according to industry sources.

In a filing with Bursa Malaysia yesterday, Perdana said that it had received notice from Dayang that it is entering into “a material corporate transaction involving Perdana,” but did not elaborate.

Shares in both companies are suspended from trading today.

Key to this privatisation, sources say, is pilgrim’s fund Lembaga Tabung Haji which has an 8.43% stake or 62.22 million shares in Perdana.

Tabung Haji’s entry cost in Perdana is estimated to be in the region of RM1.80, but the actual price is hard to determine. Notice of the pilgrim’s fund surfacing as a substantial shareholder was first made in July 2010, when Tabung Haji had already accumulated 9.24% or had 30.23 million shares, and the announcement was made after it bought 5,000 shares.

Nevertheless, this could mean that Dayang could end up forking out a chunk for Perdana (fundamental:1.3; valuation:1.4). At RM1.80, the pilgrim fund’s block is 20% higher than Perdana’s last traded price of RM1.50 yesterday. At RM1.50, Perdana had a market capitalisation of RM1.12 billion.

It is also noteworthy that Perdana’s five-day weighted average is likely to be lower than RM1.50, considering that Perdana’s stock has been running. Since mid-March this year, Perdana’s stock has been up more than 48%.

Other than Tabung Haji, its executive director Datuk Henry Poh Eng Kho has a 5.2% stake in the company.

For its financial year ended December 2014 (FY14), Perdana posted a net profit of RM88.05 million from RM347.22 million in sales. Its net tangible assets for the year in review was 89 sen.

Dayang (fundamental:2.7; valuation:2.1), meanwhile, registered a net profit of RM178.55 million on the back of RM876.87 million in sales for FY14. As at end- December, Dayang had cash and bank balances of RM194.90 million, while it had short-term borrowings of RM82.96 million and long-term debt commitments of RM70.92 million.

At its close of RM2.64 yesterday, Dayang had a market capitalisation of RM2.31 billion.

Dayang’s move to wrest control of Perdana is so it can control the latter’s marine spread which makes up about 40% of the cost of any hook-up, construction and commissioning, and topside maintenance contract.

Speculation about Dayang taking control of Perdana has been rife since late last year. Adding to the speculation, Dayang has been slowly accumulating its interest in Perdana Petroleum since October last year when it held only a 25.49% stake.

Perdana (fundamental:1.3; valuation:1.4), which provides offshore marine services for the upstream oil and gas industry, saw its share price close up five sen, or 3.45% yesterday to RM1.50 with a market capitalisation of RM1.1 billion.

This article first appeared in The Edge Financial Daily, on May 14, 2015.