June 18, 2010

TGOFFS - OSK maintains 'sell' call on Tanjung Offshore

Stock Name: TGOFFS
Company Name: TANJUNG OFFSHORE BHD
Research House: OSK

OSK Investment Research has maintained its 'sell' call on oil and gas services provider, Tanjung Offshore Bhd, despite the emergence of Ekuiti Nasional Bhd (Ekuinas) as substantial shareholder.

"We are keeping our call unchanged until we see strong earnings recovery from the company, which we believe would materialise especially after it turns around its CiTECH business," it said in an equity note here today.

Ekuinas, the government-linked private equity fund management company, yesterday agreed to buy 20 per cent stake in the company for RM73.4 million, or RM1.30 per share.

The proceeds from the placement will be used to reduce Tanjung Offshore's debt and pare down its gearing to about 1.5 times from 1.9 times currently, it said.
OSK said Ekuinas was also commercially-driven, with investments focused on strong Malaysian companies with high-growth potential.

"From its recent stake buy, we believe Tanjung Offshore qualifies for this category," it said. - BERNAMA


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