Uzma fast-forwards listing plans

OIL and gas services provider Uzma Bhd plans to float on the second board of Bursa Malaysia by the third quarter of this year, some two years earlier than previously planned in 2005.

Managing director Datuk Kamarul Redzuan Muhamed said that it was the right time for a listing given the booming global oil and gas industry.

"Personally, there is no specific better time for the company to go for listing. While the climate for oil and gas companies is good, the stock market is down at the moment.

"But we are not looking for a place to invest on a short-term basis," he told Business Times in an interview.

Kamarul said the third quarter listing target was timed to coincide with the usual increase in demand for fossil fuels.

"Come winter there will be a lot of demand for energy, and it will be the time when people start negotiations over next year's budget," he added.

Uzma, established in 2000, will launch its prospectus today.

Its initial public offering (IPO) will involve the issue of 20 million new 50-sen shares and an offer for sale of 10 million shares at RM1.90 per share.

Of the 20 million shares, six million will be issued to the public and nine million to eligible directors, employees and business associates.

Proceeds from the IPO will be used to set up a geological laboratory, repay bank borrowing and for listing expenses, purchase of computer equipment and working capital.

Kamarul said the company's main reason to seek a listing was the need for capital expansion.

"In the past, we made our money from lump-sum fees or date rate, but now, we want a slice of the cake.

"If we find the oil, we want a cut of the profits, meaning we want some sort of commission or certain percentage for the risks that we take in finding the hydrocarbons."

Kamarul added that Uzma could not enter into this type of risk-reward structure with the oil players before because of its size.

"Through the IPO, our paid-up capital will increase and provide us strong financial backing to go ahead with the risk-reward structure plan," he said.

Uzma also plans to use the funds to expand its business overseas.

"We are in Thailand, Australia, Qatar and Indonesia, and plan to open our office in India and Sudan next year."

Uzma's offices in the Thai capital Bangkok and Perth in Australia serve as its regional offices, taking care of its operations in Indochina and Australasia respectively.

"Sudan will take care of our operations in the South Asian and North African regions," Kamarul said.

Seventy-five per cent of Uzma's revenue is derived from the domestic market, and the rest from overseas.

"With the listing, we expect our international business portion to grow significantly."

Uzma provides consultancy services under its three core businesses of geoscience and reservoir engineering, drilling, and project and operation services. It serves 45 clients in 34 countries.