Sarawak Consolidated ventures into government affordable housing project

KUALA LUMPUR (Dec 29): Sarawak Consolidated Industries Bhd is acquiring Carlton Gardens Sdn Bhd for RM9.5 million, which would see the loss-making property developer penetrate into the government's affordable housing programme.  
The group said the acquisition of the asset from Gaya Belian Sdn Bhd, Brian Francis Ticcioni and Asgari Mohd Fuad Stephens would be funded by cash, as well as issuance of new shares. 
"The proposed acquisition will provide immediate returns to Sarawak Consolidated Industries, as Carlton Gardens has secured work for the next 18 months at stage 1 of the Beaufort 1Malaysia People's Housing Programme (PR1MA) affordable housing projects," it said in a filing to the stock exchange today. 
Sarawak Consolidated owns and operates an interlocking block Industrialised Building System (IBS) factory in Beaufort, Sabah
Carlton Gardens has been awarded a contract by Stone EPC (Sabah) Sdn Bhd for the supply and installation of interlocking blocks and associated structural and finishing works for a project to construct 620 residential units at Woodford Estate in Beaufort.
Based on this, Sarawak Consolidated expects the acquisition to contribute positively to its earnings as the Beaufort project is planned to be a continuing development of both affordable and general housing units being developed over a 20-year development programme.
"Carlton Gardens will be in a prime and preferred position to deliver its interlocking block IBS to these developments. The interlocking block IBS factory has the capacity to deliver blocks to other developments in the Beaufort and Kimanis areas, which are growing quickly as a result of the Sabah Oil & Gas Terminal in Kimanis," it added. 
Sarawak Consolidated said the interlocking block IBS factory is re-locatable to another site, if a specific opportunity arise at the completion of the Beaufort PR1MA project, thus leading to reduction in transportation cost for the transport of IBS blocks to another major development location. 
It added that Carlton Gardens would provide a profit guaranteed of not less than RM7.19 million for the financial year ended Dec 31, 2018.
Meanwhile, Sarawak Consolidated has proposed to reduce its issued and paid-up share capital by cancelling 50 sen of the par value of each existing share of RM1.  This will give rise to a credit of RM36.79 million, to wipe off its accumulated losses amounting to RM30.63 million and RM36.18 million at the group and company level respectively as at Sept 30, 2016. 
Subsequent to that, the group intends to undertake a private placement of up to 36.39 million shares, representing up to 45% of the enlarged issued and paid-up share capital, to raise RM21.84 million for business expansion, working capital and repayment of bank borrowings. 
Sarawak Consolidated shares were not traded yesterday. They last traded at 59 sen, giving the company a market value of RM43.41 million. —

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