CIMB in $70m oil and gas deal

The private equity arm of CIMB Group, Malaysia’s second-largest financial services provider, is forming a $70 million joint venture in the oil and gas industry with a subsidiary of Alam Maritim Resources, an owner and operator of offshore vessels.

CIMB Private Equity and Venture Capital will hold a 51 percent stake in the new Alam-PE Holdings, which plans to acquire five vessels to support moderate and deepwater exploration activities off Malaysia in the near term. CIMB Group’s Islamic banking and finance franchise is providing a $63 million Sharia-compliant loan to the joint venture to help fund the purchases.

Alam Maritim chief executive officer Azmi Ahmad said in a statement that the deal would help his company expand in the offshore support vessels industry as well as improve its credit rating. CIMB Group will also provide advice on treasury and foreign exchange derivatives to help Alam Maritim manage its debt-to-equity ratio and employ its financial resources more effectively.

CIMB Private Equity has more than $370 million in capital under management and focuses on medium- to long-term investment opportunities in Southeast Asia, including in the healthcare, communications, agriculture and manufacturing sectors. In the last year the firm has invested $3 million in TraceTracker Innovation, a global food traceability solutions company whose clients include BASF and Skretting, and acquired a 60 percent equity stake in Cosmo Restaurants, the largest Burger King franchisee in Malaysia.

In April CIMB’s Standard Strategic Asset Advisors subsidiary also sold its 8.1 percent stake in Australia’s Indo Mines, netting a return of 2.3 times its original $2.6 million investment.