KUALA LUMPUR: Scomi Engineering Bhd has exited the machine shop business with the proposed disposal of its subsidiaries Scomi OMS Oilfield Services Pte Ltd and Scomi OMS Holdings Sdn Bhd to a foreign-listed multinational corporation (MNC) for US$110 million (RM363 million).

Scomi OMS, the energy engineering arm of Scomi Engineering, is the leading provider of oil country tubular goods machine shop services to the oil and gas industry with a network of 10 machine shops in seven countries.

In a statement on Wednesday, March 17, announcing its acceptance of an offer from the MNC, Scomi Engineering did not provide details of the prospective buyer but said its identity was being withheld at its request and would be disclosed at the time of the execution of the definitive share sale agreement.

It said the MNC had a turnover of over US$1 billion last year and had offices in over fifty countries, with more than 50,000 employees and multiple business lines including metal products.

Scomi Engineering said the MNC had provided a bank guarantee of US$2.2 million, representing 2% of the proposed sale consideration. It said the proposed consideration was subject to any price adjustment pursuant to a due diligence to be conducted by the buyer within 30 days.

Scomi Engineering president Syahrunizam Samsudin said the disposal of the machine shop business was in line with its business strategy to position itself as an urban transportation solutions provider focusing on monorail solutions.

"As part of an overall value proposition of Scomi Group being a global technology enterprise, Scomi Engineering will intensify its focus on its core engineering activities, strengthen its research and development initiatives, and invest in new technologies for public transportation products," he said.

Scomi Engineering in January this year had delivered the first monorail car to Mumbai and is currently on schedule to deliver the first set of four-car train monorail to Mumbai by mid-year 2010.

Moving forward, the company said it and its partner CR Almeida SA Engenharia De Obras had been shortlisted as one of the two consortiums to undertake the US$1.7 billion monorail project in Sao Paolo, Brazil. They were among four consortiums which had tendered for the 23.9km monorail project known as the Expresso Tiradentes monorail project.

"Being qualified as one of the final two bidders for the Expresso Tiradentes monorail project is truly an important milestone for Scomi as this also signifies the acknowledgement and acceptance of our technology by the world," said Syahrunizam.

Apart from Brazil, the group said it has also made major inroads with marketing efforts in the key emerging markets of the Gulf states and China to pursue opportunities in monorail projects as the preferred public transportation solution provider.