(AFP) - United Engineers (M) Bhd. (UEM) said today it had granted tycoon Halim Saad a two-month extension to pay for shares in Renong Bhd.

The announcement came on the eve of Halim's deadline to settle a second 100 million ringgit (26.3 million dollars) instalment from a put option agreement with UEM.

Halim, who is Renong executive chairman, earlier asked for a 78-day extension to October 1 to pay the second instalment. On February 14 he paid an initial 100 million ringgit instalment.

The payments are part of a total of 3.2 billion ringgit Halim must pay to buy back UEM's 32 percent stake in Renong to honour a put option.

A put option gives the holder the right to sell the underlying shares at an agreed price within a specified time.

UEM, a unit of debt-laden but politically well-connected Renong, is Malaysia's biggest toll road operator and also has other interests.

UEM, in a statement to the stock exchange BSKL today, said it had granted Halim a 60-day extension.

But it warned that it would "take whatever measures it deems necessary to recover the debt and to protect the interests of shareholders" if full payment was not received by September 12.

UEM said its board of directors held the view that the market was not recognising the full value of UEM's assets, partly due to the unresolved issue of Halim's debt.

"The board intends to take immediate steps to release some of the value of these assets for the benefit of its shareholders," UEM said, adding that consultants Arthur D Little have been asked to accelerate work on this matter. No details were given.

Halim last month resigned as executive vice-chairman of UEM after 16 years, without giving any reasons.

Analysts said the move could be a prelude to him taking UEM private, which would save him one billion ringgit compared with paying for the put option.