More Buy-backs into YTL Cement?

YTL Corp Bhd may choose to buy subsidiary YTL Cement Bhd if there are not many attractive merger and acquisition (M&A) opportunities in the market, says an analyst.

“The group might be eyeing YTL Cement because of the low liquidity,” she told StarBizWeek yesterday. YTL Corp has a 50.1% stake in YTL Cement.

YTL Corp’s  Francis Yeoh had said that if there is nothing attractive, they may buy more into their own subsidiaries with some of the war chest cash reserve of RM12 billion.

YTL Corp is focussing on purchasing businesses of the infrastructure-type like water, electricity and transport and expanding its cement footprint.

Other subsidiaries under the group include YTL Land & Development Bhd and YTL Power Power Int Bhd.
At the EGM, the group said it was eyeing “sizeable acquisitions” as subsidiaries under the YTL group had restructured their balance sheets and were now “strong enough” to pay out consistent and substantial dividends.

Yeoh said the amount would be as much as RM1bil in dividends from its subsidiaries for its current financial year ending June 30, 2011.

“YTL Corp will be able to get RM1bil per year from now from our subsidiaries. With the restructuring and dividends, we can easily look at sizeable M&A opportunities,” he said.

YTL Cement, commanding about 30% of market share, is the second largest cement manufacturer in Malaysia after Lafarge Malayan Cement Bhd.