OSK Research has upgraded KENCANA PETROLEUM BHD to Buy with revised fair value of RM3.17.
The research house said on Monday, May 16, it viewed positively Kencana’s plan to acquire Allied Marine & Equipment Sdn Bhd for RM400m from Worldclass Inspiration Sdn Bhd and Allied Asset Holdings Sdn Bhd.
OSK Research said the purchase would be satisfied by the issuance of 149.3m new shares of Kencana at RM2.68 a share.
“This acquisition also comes with a profit guarantee of RM40m. The entire exercise is expected to be completed by 3QCY11.
“We view this acquisition positively as it would help Kencana to expand vertically. Upgrade to Buy with revised fair value of RM3.17,” it said.
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