Konsortium Logistik Planning $74.5 Million Sale Leaseback of Warehouses in Malaysia

Business Times Online - August 9, 2007

Konsortium Logistik, Malaysia's biggest logistic provider for the local car industry, could return as much as RM120 million or 49 sen a share to shareholders as part of a restructuring exercise, JPMorgan said in a report. The US investment bank based its report on information obtained from the management of Konsortium, Malaysia's biggest logistic provider for the local car industry.

The report issued on Tuesday said Konsortium plans to adopt an asset-light strategy by selling most of its landed assets earmarked for future development in Malaysia and abroad. It also plans a sale and leaseback exercise for its warehouses.

These could raise as much as RM250 million ($74.5 million) for Konsortium and place it in a net cash position of RM150 million by year-end. The firm also hopes to institute a generous dividend policy by paying out all of its operating profit. "The complete streamlining of its operations will result in Konsortium only focusing on vendor supply chain management for the car sector and government project concessions," JPMorgan said.

Meanwhile, Konsortium also plans to reduce its capital expenditure by leasing some 200 new trucks in the future to replace its ageing fleet. "The future 200 new trucks will be leased and will not be on the balance sheet. The new leases are expected to generate a five-year payback period," the report said. Sphere: Related Content