SCIB buys loss-making Selangor construction firm to expand biz in Peninsular Malaysia

KUALA LUMPUR (April 14): Sarawak-based Sarawak Consolidated Industries Bhd (SCIB) is acquiring a loss-making construction firm in Seri Kembangan, Selangor for RM4.98 million, to explore business expansion plans in Peninsular Malaysia.

In a bourse filing, SCIB said the group inked a conditional share sale agreement with three individuals — Noorazylawati Abdul Bakar, Mohd Khairil Mohd Hatta and Ibrahim Mohd Noor — to acquire Kencana Precast Concrete Sdn Bhd (KPCSB). It will settle the purchase via a combination of internal funds and/or bank borrowings.

SCIB said the purchase price was arrived at after taking into consideration the market value of a parcel of land owned by KPCSB, which was appraised to be worth RM5 million (about RM47 per square foot), based on a valuer's report in mid-2019. No other details of the plot were provided.

KPCSB, incorporated in 2010, has been loss-making for the last two years, with a net loss of RM619,254 reported for its financial year 2019 (FY19) and a net loss of RM117,478 for its FY20.

"The proposed acquisition of KPCSB was undertaken with a view to penetrate into the manufacturing and construction sector of supplying precast concrete components, such as precast beam, column, wall staircase, half slab and plank to the market in Peninsular Malaysia.

"Looking ahead, the proposed acquisition will enable the group to participate in the expected implementation of new and ongoing infrastructure projects such as the East Coast Rail Link, Mass Rapid Transit 2 (SSP Line, Sungai Buloh-Putrajaya), Light Rail Transit Line 3 (Bandar Utama-Klang), Lebuh Raya Putrajaya (Mex-KLIA-KLIA2)," SCIB said in a statement.

The proposed acquisition is expected to be completed by the second quarter of 2021.

SCIB, whose largest shareholder is Datuk Dr Mohd Abdul Karim Abdullah, the billionaire behind Serba Dinamik Holdings Bhd, closed four sen or 2.26% lower at RM1.73 today, giving it a market capitalisation of RM848.76 million. The stock has jumped over 250% in the past 12 months.

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