Scomi To Sell Machine Shop Business In Nigeria For US$39.77 Million

KUALA LUMPUR, May 17 (Bernama) -- Scomi Group Bhd has entered into an agreement to sell its machine shop business in Nigeria for US$39.77 million (about RM123.9 million). Scomi inked a conditional share sale agreement with AOS Orwell Ltd, to dispose of a 100 per cent equity interest in Scomi Nigeria Pte Ltd and two per cent equity interest in Oiltools Africa Limited, the company said in a statement Thursday. "The proposed disposal is part of Scomi's divestment plan to strengthen our resources for future investments by unlocking the value of the business. "The sale of the Nigerian machine shop business is the final step in the company's exit strategy from the machine shop business," the company said. In 2010, Scomi sold its subsidiary Scomi Engineering Bhd's machine shop business in Asia Pacific and the Middle East to Sumitomo Corporate Asia Pte Ltd for US$101.45 million. In 2011, Scomi continued the divestment plan in the following year with the disposal of its machine shop business in Aberdeen, United Kingdom for 1.0 million pounds. Acquired in 2005, the Nigerian machine shop business had gained from the sale of all the machine shops in excess of US$120 million. Scomi Group Chief Executive Officer Shah Hakim Zain said with the strategic sale, Scomi intensified its focus on higher margin, high value added activities in high growth markets where the company holds leading market positions. "By actively managing our portfolio we are able to concentrate our people, capabilities and investment on sustaining Scomi's oil and gas business in for the long term," he said. He added that the proceeds from the disposal would be used to strengthen the entity's financial structure. The exercise is expected to be completed by the third quarter of 2012, subject to all the required approvals being obtained. -- BERNAMA