This article first appeared in Corporate, The Edge Malaysia Weekly, on May 16 - 22, 2016.

LAST week, corporate player Loo Hooi Keat made the news again when a company linked to him — Swift Haulage Sdn Bhd (formerly known as Yinson Haulage Sdn Bhd) — acquired MISC Integrated Logistics Sdn Bhd (MILS) from shipping company MISC Bhd for RM358 million.

The amount comprises a purchase consideration of RM257.2 million, derived from MILS’ audited net assets of RM255.5 million as at 

Dec 31 last year; the repayment of a shareholder loan of RM66.8 million owed to MISC; and receivables due from MILS to MISC of RM34 million.

When contacted by The Edge, Loo said in a text message that the “last three years, we have built [Swift Haulage] to be the largest haulier”. He did not answer other questions.

As Loo was abroad at the time of writing, it was not possible to obtain the reason for what seems like a high price tag for the logistics business of MISC.

A check with the Companies Commission of Malaysia’s (SSM) website reveals that MILS reported a net profit of RM10.56 million on revenue of RM406.74 million for the financial year ended Dec 31, 2012.

As at end-2012, MILS had non-current assets of RM280.71 million and current assets of RM194.17 million. On the other side of the balance sheet, it had current liabilities of RM178.52 million and long-term debt commitments of RM57.85 million.

The company also had negative reserves of RM113.21 million.

There had been previous attempts to dispose of MILS. In March 2014, MISC proposed to sell MILS to Golden Age Logistics Sdn Bhd, a wholly-owned subsidiary of Utusan Printcorp Sdn Bhd, for RM250 million cash after taking into consideration MILS’ unaudited net assets of RM246.5 million as at Dec 31, 2013. Utusan Printcorp is, in turn, a 40%-owned unit of Utusan Melayu (M) Bhd.

However, the proposed disposal was called off in January last year as Golden Age Logistics was unable to fulfil its obligations as stipulated in the agreement.

Why the price tag for MILS has risen by 43.2% in two years is anyone’s guess.

According to Swift Haulage’s website, the company has 225 prime movers and a whole host of other assets including a 100,000 sq ft warehouse. MILS, meanwhile, has over 200 prime movers and 700,000 sq ft of covered storage facility.

MILS is a wholly-owned subsidiary of MISC, which, in turn, is a 62.67%-owned unit of national oil firm Petroliam Nasional Bhd. For MISC, contribution from this logistics division is minimal to the group’s net profit of RM2.47 billion and revenue of RM10.91 billion in FY2015.

MISC has been looking to sell MILS — the last piece of its container logistics business — for some time now as part of its plan to dispose of its non-core logistics business to focus on its core shipping and offshore business.

In June 2012, MISC exited its container shipping operations. In December 2014, it sold 73.99 million shares or a 15.73% stake in port operator and haulier NCB Holdings Bhd for almost RM222 million or RM3 a share.

It is difficult to gauge the profitability of MILS over the past few years. But based on the performance of NCB’s haulage arm, Kontena Nasional Bhd, it appears that the business environment has gotten tougher since 2012.

Checks on NCB’s financials show that Kontena Nasional had a net profit of RM3.92 million on revenue of RM344.94 million as at end-2012. For the nine months ended Sept 30 last year — its last Bursa Malaysia filing prior to being privatised by MMC Corp Bhd — Kontena Nasional reported a net loss of RM27.22 million on revenue of RM159.39 million.

It is noteworthy that Loo and his partners, through Persada Bina Sdn Bhd, took over a 70% stake in Yinson Haulage from Yinson Holdings Bhd for a mere RM1 in February 2011 — further proof that the haulage industry has been undergoing difficult times. Loo has a 30% stake in Persada Bina while the rest is held by Datuk Md Yusoff @ Mohd Yusoff Jaafar.

Loo is an old hand when it comes to the haulage industry. He surfaced in Konsortium Logistik Bhd in October 1992 with his partner Mirzan Mahathir, the eldest son of former premier Tun Dr Mahathir Mohamad.

Mirzan ceased to be a substantial shareholder of Konsortium Logistik in August 2007, while Loo exited the company in October 2010 after government-linked private equity fund manager Ekuiti Nasional Bhd (Ekuinas) made a general offer for the rest of the shares it did not own at RM1.55 apiece. Before that, Ekuinas had acquired 56.5% equity interest from Konsortium Logistik’s major shareholders, including Loo, Mohd Aminudin Mustapha and Zulkifli Sarkam.

Under Loo’s stewardship, Konsortium Logistik had acquired the assets of rival Diperdana Holdings Bhd for RM80 million in early 2001. Controlled by businessman Datuk Badri Masri, Diperdana was one of the larger haulage companies in the country.

So, what are Loo’s plans for Swift Haulage?

Loo did not respond to a question from The Edge on whether he is looking to float Swift Haulage on Bursa Malaysia.

Thus far, the company seems to have done reasonably well. For its financial year ended Dec 31, 2014, it reported a net profit of RM8.10 million on revenue of RM120.44 million.

As at Dec 31, 2014, it had non-current assets of RM257.14 million and current assets of RM74.46 million. Its non-current liabilities amounted to RM164.96 million, while its short-term debt commitments were RM103 million.

A check with SSM’s website reveals that Loo Yong Hui, Zulkifli and Md Yusoff are listed as Swift Haulage’s directors.

Persada Bina has a 50.16% stake in the company. Another 16.49% is held by Laserforms Sdn Bhd, a company controlled by Robiah Mohamed, while Glory Portfolio Sdn Bhd — the vehicle of Chia Kwoon Meng — has 7.63%. Tan Kar Tek holds 11.84%, while Chua Seng Yong, Ng Chee Kin, Oh Chin Beng and Rebecca Xu-Xian Tan have between 3.79% and 3.20% equity interest each.

Chia is known in market circles for having been a substantial shareholder in companies such as Fututech Bhd (now Kerjaya Prospek Group Bhd) and Rexit Bhd.

Given that Loo’s plans seem to be taking shape, he, Swift Haulage and MILS are likely to remain in the limelight in the near term. 

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