Value Creation Case Studies

Orkim Sdn Bhd (Orkim)

Orkim Sdn Bhd (Orkim)

Background

  • Orkim is one of Malaysia’s leading Clean Petroleum Product (CPP) tanker companies which was founded in 2004 initially as a ship broker business
  • Strong track record of growth and with 17 vessels under ownership and management
  • Transports CPP from refineries to various oil storage terminals throughout the country and currently has 40% leading market share.

Transaction Details

Investment type
Buy out of non-core assets of GLC/PLC
Acquisition Date
December 2014
Ownership
95.5%

Investment Rationale

  • A market leader with strong outlet presence in peninsular Malaysia
  • Margin improvement opportunity via business process optimisation and investment in technology

Key Value Creation Metrics

  • Contract Renegotiation

    • Ekuinas Portfolio Monitoring and Management team identified a gap in respect of the cost computation of the respective vessels.
    • The discovery prompted a renegotiation of the relevant terms in the contract which resulted in a positive impact of RM2 million to Orkim’s bottomline.
    • Ekuinas then initiated a merger between TKS and OMNI under Icon Offshore Bhd with the aim of creating a leading Malaysian OSV player.
  • Fleet Expansion

    • Increased market share in the Malaysian CPP market by growing vessel fleet via vessel acquisitions
    • Invested in four additional CPP vessels between FY2015 to FY2018 which increased dead weight tonnage (DWT) capacity by 37% to boost growth in revenue and profits by increasing fleet size and yield
  • Diversification of Product

    • Ventured into LPG market and invested in two LPG tankers in 2015 – 2016 to serve the regional LPG transportation market
    • The delivery of the LPG tankers made Orkim the first local LPG tanker operator in Malaysia
  • Strong Revenue & EBITDA Growth

    • Gross revenue growth* of 22.4%; net revenue growth of 19.7%
    • EBITDA growth* of 15.4%

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