SINGAPORE, March 7: Malaysia's national oil company Petroliam Nasional Berhad (Petronas), which has embarked on joint ventures with Indian Oil Corporation, announced on Friday that it has acquired the troubled shipping arm of Konsortium Perkapalan, in which Malaysian premier Mahathir Mohamad's eldest son Mirzan Mahathir has a 51 per cent stake.The deal has understandably sparked a controversy, although both parties have denied that there was any ``bail-out'' involved. According to Konsortium's 1996 accounts, the company had a net debt of 1.5 billion Malaysian ringgit Public concern about the implications of the acquisition centres round the future health of Petronas, which is one of the few Malaysian companies which appeared to have kept their heads above water in the ongoing financial crisis engulfing the country and the region. Last year alone, it chalked up profits to the tune of $5 billion.At Friday's news conference, Petronas chairman Mohamad Hassan Marican declined to disclose the financialdetails of the deal, which is to be partly financed through bank borrowings.Mirzan estimated that Konsortium's shipping operations - Pacific Basin Bulk Shipping and two liquefied natural gas companies - were worth about $300 million.Singapore's Business Times reported that Friday's deal aborted an earlier restructuring exercise under which Konsortium was to hive off Pacific Basin to PNSL Holdings (formerly known as Diperdana) in exchange for shares. PNSL Holdings would have become the shipping arm of Konsortium.The paper also quoted Mirzan as saying that Konsortium would have incurred a significant loss of RM1.1 billion if it had gone ahead with that restructuring exercise. "Well, it will only be a bailout if you say it is, but this is done on a purely commercial basis. We are not looking to make more than what the market terms it to be," he said.The acquisition is of special significance to India at this juncture, when Petronas is in the process of considering taking a stake in the 6 milliontonne Nagapattinam oil refinery along with IOC and Madras Refineries. The joint venture has been hanging fire for months now, with Petronas dragging its feet over its participation, although it has not yet made any statement about opting out.Petronas is already in collaboration with IOC, having signed an MoU for trading in crude oil and petroleum products, chemicals and petrochemicals, formation of joint ventures for grass-roots refineries; blending, packaging and marketing of lubricants; participation in research, training and development and exchanging management training opportunities.The two companies recently signed a joint venture agreement for setting up liquefied petroleum gas import facilities at Haldia and marketing of liquefied petroleum gas (LPG).
