(AFP) The departure of tycoon Halim Saad and eight board members from the Renong group marked a new lease of life for Malaysia's most debt-burdened conglomerate, analysts said Thursday.

Renong announced late yesterday that Halim Saad had resigned as executive chairman and director, just a day after the government closed its one-billion-dollar takeover offer for affiliate United Engineers Malaysia (UEM).

Halim's resignation after more than a decade at the helm of Renong, along with the eight others, left only two "old hands" on the board. It would pave the way for firmer government control in Renong and improve its prospects, analysts said.

Political clout

Renong, which once enjoyed political clout as the investment arm for Prime Minister Mahathir Mohamad's ruling party, is saddled with more than RM13 billion ringgit in debts.

Mahathir said today the government was still studying options for restructuring the Renong group and returning it to the black.

"At the moment, we are looking at the whole UEM to find out the ramifications and the need to restructure and to make it viable," he told a press conference.

Asked if the government would delist Renong, he said: "We have not decided about selling off the subsidiaries or the associated companies because we have to go into this matter in great detail before we make a decision."

The government's Danasaham agency is now effectively the largest shareholder of Renong after taking over the country's biggest toll operator UEM, which owns 31 percent of Renong.

Shares up

News of Halim's resignation pushed Renong shares up 0.11 ringgit to 0.815 today despite a weaker overall market. UEM stock was flat at RM4.24 ringgit.

"The rise of the stock has something to do with Halim and his (associates') resignations. There was not much interest in the stock previously but now its outlook looks brighter," said a local dealer.

Halim was closely associated with former finance minister Daim Zainuddin and was in charge of several deals which were frowned on by the market and investors, analysts said.

"Investors are hopeful that with the departure of Halim Saad, Renong and its stable of companies will be more transparent in its dealings and this will augur well for the companies," said an analyst with a foreign research house.

Analysts said the market would be watching to see how the new UEM board handles a put option with Halim, under which he must pay some 3.2 billion ringgit to buy back UEM's stake in Renong.

Some said the government may work out a scheme to cut Halim's personal holdings in Renong and sever his ties to the group.

The Renong group has strategic interests in banks, oil and gasfields, property, telecommunications and transport.