This article first appeared in The Edge Financial Daily on June 25, 2019

KUALA LUMPUR: Handal Resources Bhd’s joint venture (JV) with Borneo Seaoffshore Engineering Sdn Bhd (BSOE) has bagged a RM360 million contract from Petronas Carigali Sdn Bhd to supply water injection module (WIM) on mobile offshore unit for mobile water injection facilities.

This raises Handal’s order book to over RM950 million, contributing to its financials until 2027.

In a filing with Bursa Malaysia yesterday, the integrated offshore services provider said the WIM — Package 4 job’s duration is seven years, from March 2020 to June 2027, with an option to extend by another three years.

Handal, via its wholly-owned Handal Engineering Sdn Bhd, together with BSOE, will be jointly responsible to discharge all obligations under the contract.

“The contract is expected to contribute positively to the group’s earnings for the financial period ending June 30, 2019 and subsequently until the contract’s expiry,” said Handal.

“This contract marks Handal’s comeback to the big league with a major contract win. Handal is positioned to leverage this to aggressively pursue more contracts in the near future,” said its managing director Sunildeep Singh Dhaliwal in a statement. “In addition, Handal will capitalise on its new shareholders’ strength, led by Seaoffshore Capital Sdn Bhd.”

Sunildeep said Handal has adopted a two-pronged strategy of securing strategic long-term contracts from its new business ventures and shorter-term contracts for its current core business, to improve its earnings.

Handal, he added, will still pursue bids for contracts that will make its presence felt in the O&G industry beyond its core crane business. “It is our plan to consolidate our business in Malaysia and then expand into the region.”

In April, Handal signed a share sale deal with SeaOffshore Capital to acquire a 51% stake in BSOE. Notably, Seaoffshore Capital is already a major shareholder of Handal, with a 14.85% stake.

After the proposed buy, slated for completion in the third quarter of 2019, Seaoffshore Capital will hold a 31.55% stake — just shy of the 33% threshold that will trigger a mandatory general offer.