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Usaha Tegas Sdn Bhd (UT) is finalising plans to sell the gaming business of Tanjong plc, post the latter’s privatisation, according to investment banking sources.

“It is only a question of time. UT is now busy finalising the funding of Tanjong’s privatisation. But once that is settled, gaming will be hived off as the focus is on the power business,” said one banker familiar with the plans.

To recap, in late July, a consortium comprising tycoon T. Ananda Krishnan’s private vehicle UT and unnamed parties acting in concert, which together own 47% of Tanjong, made an offer to buy out the firm at RM21.80 a share in cash. The takeover has yet to be concluded, with Tanjong recently extending the closing date for acceptances of the offer to Sept 27.

It is no secret that UT’s ultimate shareholder, Ananda, has little interest in pursuing the gaming business. “It is a philosophical decision. He just doesn’t like being in the gaming business,” said one source.

It has already been speculated that Ananda may consider selling off his gaming business and bringing back to the market his power assets in one form or another.

Part of the rationale for privatising Tanjong is that the group suffered from a conglomerate discount.

Tanjong’s gaming division consists of its numbers forecast totalisator (NFO) and racing totalisator (RTO) business.

Although the NFO business has proven healthy, Tanjong continues to see losses from its racing operations. According to a UOB Kay Hian report, the losses from the RTO business could reach up to RM80mil for the current financial year.

Tanjong’s gaming arm Pan Malaysian Pools Sdn Bhd reportedly has about 24% market share, the least of the country’s three players. Berjaya Sports Toto Bhd’s market share is about 40% while Magnum Corp Bhd’s is 36%.

Tanjong stood out as the player that had done the least among the three players to grow its gaming business in terms of new products and outlets, indicating Ananda’s lack of interest in the industry, analysts pointed out.

Analysts said that UT should be able to fetch around RM2.4bil for Tanjong’s gaming business, based on an assumption that the buyer was willing to pay around a 15 times multiple of the earnings of the business.

Meanwhile, it had been reported that around 70% of the acquisition price tag of RM4.7bil to privatise Tanjong would come from the debt market, with a ringgit financing been given priority over US dollar, although a portion of the deal was still expected to be funded offshore. Tanjong Capital, the unit of UT taking over Tanjong, is also expected to raise an additional US$500mil equivalent at the same time to fund expansion needs after taking the target company private.

Bankers also pointed out that after the hiving off of Tanjong’s gaming business, Ananda was likely to relist Powertek Bhd, the power business of the Tanjong group.

Powertek, a power generator with exposure to local and foreign markets, was listed on the local stock exchange in 1996, only to be taken private by Tanjong Energy Holdings Sdn Bhd in 2003.

However, contrary to speculation, Ananda was unlikely to list his oil and gas support services company, Bumi Armada Bhd, anytime soon, sources said.

Ananda had privatised Powertek and Bumi Armada in 2003, in deals worth a combined RM800mil.

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Sino Hua-An International Bhd returned to the black in the second quarter ended June 30, 2010, posting a pre-tax profit of RM4.844 million against a pre-tax loss of RM13.279 million in the corresponding period last year.

The return to profitability was after two consecutive quarters in the red, and is due to the continuing recovering trend in the coking and steel industry, albeit a gradual one.

In a filing with Bursa Malaysia Securities, Sino Hua-An said its revenue rose to RM342.506 million from RM301.760 million due to the favourable upward trend in the pricing of metallurgical coke and majority of the by-products in the current quarter experienced by the group.

It said the average prices of metallurgical coke, crude benzene, tar oil, coal slime and middlings in the second quarter have increased by approximately 35 per cent, 49 per cent, 34 per cent, 51 per cent, and 14 per cent respectively compared with those of the preceding year’s corresponding quarter.

However, the price of ammonium sulphate has dropped by approximately 16 per cent and the price of coal gas remained fairly constant in the current quarter compared to the same quarter last year, it added.

For the half-year period, its pre-tax profit was RM2.362 million against pre-tax loss of RM36.911 million in the previous corresponding period as revenue rose to RM716.098 million from RM612.711 million.

Sino Hua-An said the group will continue to focus on its core business activity which is the manufacturing and trading of metallurgical coke and its by-products.

Notwithstanding the improved financial performance shown in the current quarter under review, the group continues to tread cautiously in light of the current issues affecting the world economy, it said.

“We anticipate that the steel industry (and that of metallurgical coke) may be faced with a challenging environment moving into the remainder of 2010,” it added.

The group is nevertheless still hopeful of seeing sustainable pricing dynamics both for metallurgical coke and coking coal in 2010 as domestic demand is still expected to be there.

Barring unforeseen circumstances, the group is cautiously optimistic of better financial results for the current year.

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IJM Land Bhd expects to launch new properties with a total gross development value (GDV) of RM1bil to RM1.2bil in the financial year ending March 31 (FY11), said chief executive officer and managing director Datuk Soam Heng Choon.

“With the outlook of the property market looking more positive this year, we expect to launch a list of new properties during this financial year. Since April, we have already launched properties with a GDV of RM500mil.

“Next month, we expect to launch new residential properties with a combined GDV of RM120mil in Sandakan, the Klang Valley and Johor Baru,” he told reporters yesterday after the group’s AGM and EGM.

On the decision not to declare a final dividend to shareholders for FY10 and the payment of only a single-tier dividend of 2% on Aug 18, Soam said the group needed to continue propelling its property projects after chalking higher sales of RM1.6bil during that financial period.

“However, we will do our best to pay dividends although the group does not have the policy on that matter,” he said.

With the property market expected to be quite robust this year and banks still providing competitive interest rates, Soam believes the group’s property sales would continue to be as strong as seen in its first-quarter results, which are scheduled to be announced today.

On a possible hike in the real property gains tax (RPGT) to curb increasing speculative buying, Soam said whatever the decision, the Government needed to be firm on its policy.

“The Government needs to stand firm on its policy or else it would give a bad impression especially to investors,” he said.

Recently there has been speculation that the Government might impose an additional 5% for RPGT, thus decreasing the returns on property sales within the five-year period as it would be subjected to the higher exit gain tax.

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