Petronas Chemicals Group Bhd., a unit of Malaysia’s state oil and gas company, fell to a two-week low in Kuala Lumpur trading after a fire halted operations at its plant.
The shares fell 0.7 percent to 5.51 ringgit at 10:52 a.m., set for their lowest close since Dec. 8. The fire which occurred Dec. 24 at an aromatic plant within its petrochemical complex in Kertih in the eastern state of Terengganu was extinguished “shortly after,” the company said. The plant has been closed as a safety precaution pending an investigation, it said.
An extended closure of the plant will cause “material impact” to Petronas Chemicals because the facility manufactures two products that jointly generated about 20 percent of the company’s revenue in 2009, according to a Maybank Investment Bank Bhd. report today.
Maybank estimated that each day of the plant closure will cost the company 6.1 million ringgit ($2 million) in lost revenue, on top of 1.2 million ringgit in fixed cost.
“This is the third day of plant closure, and therefore the total losses amount to 21.9 million ringgit since the fire broke out,” Maybank said in a note to client. Maybank said it doesn’t expect the incident to lead to force majeure, a legal clause invoked by companies when they can’t meet obligations because of circumstances beyond their control.
Siti Azlina A. Latif, a spokeswoman at Petronas Chemicals, said today that the company has no further comments.
Petronas Chemicals, a unit of Petroliam Nasional Bhd., was listed in Malaysia last month after raising 12.8 billion ringgit in the Southeast Asian nation’s largest initial public offering. The share sale was part of Prime Minister Najib Razak’s plan to attract more overseas investment by selling state-owned assets.
“We remain optimistic of Petronas Chemicals and this fire has not dented any of its solid long-term fundamentals,” Maybank said. “We are still buyers of Petronas Chemicals and think that any steep price decline represents an opportune moment to buy.”