Malaysian tycoon makes a comeback in logistics

Loo, who also owns and runs Pelikan International Corp Bhd as its president and chief executive officer, is best known for his business partnership with Mirzan Mahathir during the 1990s when they had owned Konsortium Logistik Bhd, which was eventually sold off.

 

This week, shipping giant MISC announced that it had entered into a sale and purchase agreement with Swift Haulage Sdn Bhd for the disposal of MISC Integrated Logistics Sdn Bhd (MILS) for up to 358  million ringgit.

 

Swift Haulage is one of the main units of the Swift group, an integrated local logistics service provider that is looking to expand.

 

According to the filing to the stock exchange, Swift will undertake to repay an RM66.8 million shareholders loan owed by MILS to MISC and receivables of up to RM34 million.

 

The logistics business is valued at RM257.2  million  based on its audited net asset as at the end of last year.

 

The 61-year-old Loo currently serves as adviser to the Swift group.

 

Based on a search on the Companies Commission of Malaysia (CCM), Swift Haulage has a diverse set of shareholdings, with the major shareholder being Pesada Bina Sdn Bhd, followed by LaserforSdn Bhd.

 

Meanwhile, the directors the company are listed as Datuk Md Yusoff@Mohd Yusoff Jaafar, Zulkifli Sarkam, Loo Yong Hui and Tham Chooi Kuan.

 

Swift Haulage has an authorised share capital of RM100  million  and a paid-up capital of RM59.411  million .

 

For the financial year ended Dec 31, 2014 (FY14), it made a profit after tax of RM8.09  million  on a revenue of RM120.44  million , the CCM search shows.

 

Swift group was set up in 2011, a year after Loo divested his 14.46 per cent stake in Konsortium Logistik.

 

“Loo still has his heart in logistics and the proposed acquisition of MILS makes him a person to watch in the logistics space,” says an industry player.

 

“The acquisition sits well with Swift’s plans to expand and possibly go for an initial public offering in the near future,” he adds.

 

The key assets of MILS, which was formed in 2001, include over 200 haulage prime movers, 800 trailers and 700,000 sq ft of covered storage facilities over several sites across Malaysia.

 

In FY15, it contributed a pre-tax profit of US$0.5  million  or around RM2  million  towards MISC’s bottomline.

 

Swift, meanwhile, has 225 prime movers and 1,400 trailers nationwide.

 

Loo is an old hand in the transport and haulage game.

 

He was also once a board member of Transmile Bhd and ran Konsortium Perkapalan Bhd and Diperdana Holdings Bhd.

 

In 2005, Diperdana bought the global Pelikan business after the sale of its earlier logistics business to Konsortium Logistik.

 

Loo’s early corporate stints was with the Sime Darby group where he served as group accountant, the Lion group of companies and United Engineers (M) Bhd from 1990 to 1992.

 

In 1992, Loo joined the Konsortium Logistik board when it was still Konsortium Perkapalan before the company went public in 1996.

 

He was the company’s executive vice-president.

 

A partner of Mirzan, Loo stayed on after Mirzan ceased to be a shareholder and left in 2007 shortly after relinquishing his post as chairman.

 

At that time, Loo and Mirzan (the son of former Prime Minister Tun Dr Mahathir Mohamad) controlled about 38 per cent of the company.

 

Back in its heyday in 1997, Konsortium Logistik was an RM17 stock, before it came crashing down following the 1998 Asian financial crisis.

 

Konsortium Logistik was floundering after the financial crisis with debts estimated at RM1.7 billion.

 

Subsequently, Petroliam Nasional Bhd’s unit, MISC, stepped in and bought its shipping assets for US$220  million  (RM682  million ).

 

In 2010, after close to 20 years in the company, Loo sold his 14.7 per cent equity interest in Konsortium Logistik to Ekuiti Nasional Bhd (Ekuinas) for RM1.55 per share or RM53.95 million.

 

Together with Loo’s block, Ekuinas went on to accumulate more than 50 per cent in Konsortium Logistik but the general offer to mop up the rest of the shares was not successful, as the offer was viewed as unattractive.

 

On why he divested, Loo said it was to focus on Pelikan International, which he “described as a multinational corporation controlled by a Malaysian”.

 

Pelikan manufactures and distributes the Pelikan brand of stationery products to over 160 countries and runs eight manufacturing facilities worldwide.

 

The 19th Century brand traces its roots to Hanover, Germany.

 

Loo currently holds a 9.81 per cent direct stake in Pelikan International with another 7.76 per cent held indirectly.

 

Pelikan International, in turn, owns 98.66 per cent of Pelikan AG, which is listed on the Frankfurt Stock Exchange.

 

However, it has not been all smooth sailing.

 

Returning to the black

 

Pelikan International has been making losses in the past five financial years with the exception of a small pre-tax profit in 2013.

 

It hopes to return to the black in 2016 after a lengthy period of streamlining its European assets.

 

For the fourth quarter ended Dec 31, 2015, the company made a net loss of RM4.40 million as opposed to a loss of RM45.96 million in the same period previously.

 

Two years ago, the Pelikan group embarked on an exercise to consolidate its stationery sales and distribution businesses into Pelikan AG (formerly known as Herlitz AG) to create a clearly defined organisational structure of management and business.

 

With this, Pelikan International became a holding company of Pelikan AG.

 

Meanwhile, in April 2015, Pelikan International completed the asset-injection exercise of its core stationery sales and distribution assets into Pelikan AG.

 

Pelikan AG houses four core brands, namely, Pelikan, herlitz, Geha and Susy Card.

 

The deal, part of the group’s restructuring measures, was to see Pelikan International raising RM462 million through an offer for sale and private placement of new shares issued by Pelikan AG.

 

The plan then was to make an offer for sale entailed up to 60  million  Pelikan AG shares, while the latter would also issue 32.9  million  new shares.

 

Early this year, it was reported that Pelikan AG had appointed investment bank BNP Paribas to look at “strategic options” for the company.

 

It’s not clear though how much of Pelikan AG’s stake is for sale, but reports quoting sources have indicated that the entire company could be sold “at the right price”.

 

It has been reported that should the exercise go through, Pelikan International shareholders could be treated to a hefty dividend payout of around RM400 million.

 

This payout would translate to around 73 sen per share.

 

Pelikan International closed down 1.91 per cent to 77 sen on Friday, giving it a market capitalisation of RM434.34 million.