Stella gets shareholders’ nod to buy construction firm Pembinaan Teguh Maju

• In a statement on Thursday, Stella said the acquisition — which comes with a profit guarantee of RM120 million for the financial year ending June 30, 2024 (FY2024), FY2025, and FY2026 on an aggregate basis — is especially noteworthy, due to PTM's RM1.16 billion worth of outstanding orders in areas such as roadworks, building construction, and mechanical and electrical projects.

KUALA LUMPUR (Nov 2): Stella Holdings Bhd received shareholders’ approval to buy construction firm Pembinaan Teguh Maju Sdn Bhd (PTM) in an extraordinary general meeting (EGM) on Thursday.

In a statement on Thursday, Stella said the acquisition — which comes with a profit guarantee of RM120 million for the financial year ending June 30, 2024 (FY2024), FY2025, and FY2026 on an aggregate basis — is especially noteworthy, due to PTM's RM1.16 billion worth of outstanding orders in areas such as roadworks, building construction, and mechanical and electrical projects.

Moreover, PTM has submitted quotations, and is in discussions for contracts totalling approximately RM1.78 billion, amplifying the earnings potential over the next three financial years, read the statement.

After the EGM, Stella managing director Datuk Benson Lau said, "Our unanimous decision to acquire PTM marks a pivotal moment for Stella. This new addition brings a vast RM1.16 billion worth of outstanding orders into our portfolio, thereby solidifying our growth prospects.

"PTM’s strengths in civil engineering, roadworks, and various infrastructure projects represent a perfect strategic alignment with our existing operations."

Complementing this acquisition, Stella will undergo a rebranding to become Varia Bhd, a change that encapsulates its wider vision and growth objectives, according to the statement.

The EGM also gave the green light for a private placement of up to 50 million shares, representing around 74.63% of the current total number of issued Stella shares or 11.99% post acquisition, said Stella.

This exercise aims to raise RM40 million for necessities like construction materials, labour costs, and subcontractors, it added.

At 2.47pm on Thursday, Stella's share price had fallen one sen or 0.93% to RM1.07, giving the investment holding company a market capitalisation of RM71.69 million.

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