CSE Global eyes new projects with Serba Dinamik

Singapore

A BLOCK sale last Friday that turned CSE Global into the associate company of Malaysia-listed Serba Dinamik came as a "pleasant surprise" to CSE's management, group managing director Lim Boon Kheng said.

However, any new contract opportunities arising from CSE's new partnership with Serba Dinamik, a mechanical maintenance service provider, will take some time to materialise, he added.

"It will take us 18 to 24 months to realise any real synergies," Mr Lim explained. "Today, we make friends. We go and bid for a job, assuming there's a ready project to bid for. Our bidding process takes nine months to a year . . . and then (by the time) you start to recognise revenue, its already more than a year later." CSE Global is a process control and communications network system integrator. Serba became CSE's largest shareholder after scooping up a 24.8 per cent share of the company from a group of exiting investors last Friday for S$57.7 million or S$0.45 a share. While Australia and the US are CSE's strongest markets, Serba's main presence is in Malaysia and the Middle East.

After CSE met with Serba as its associate company for the first time on Wednesday, Mr Lim told The Business Times: "At this juncture, the thinking is to work together. Top on my list is how we can work together in the Middle East."

CSE cut back its presence in the Middle East over the last three years, and slow payments by three customers there resulted in it taking a S$11.7 million impairment on trade receivables last year. Now, Mr Lim hopes that CSE can leverage on Serba's customer base there. To be sure, Mr Lim had met with Serba two or three times late last year as CSE had been on the lookout for potential partners. But then Serba went quiet for a few months, he said.

"I think without involving us, they went to approach a couple of the shareholders. We got a call a few days before the transactions, they said we would work together in the future. Honestly at that juncture we didn't know the deal because we were not involved," Mr Lim said.

CSE's revenues bottomed out in the first half last year, said Mr Lim. He expects more greenfield projects from customers in the oil and gas industry to start rolling in during the second half of this year.

CSE Global's shares fell half a cent or 1.18 per cent to close at S$0.42 on Thursday.