Rivertree enters into a RM600m related-party deal to build labour quarters

KUALA LUMPUR (March 4): Rivertree STF Synergies Bhd (KL:RSSB), formerly known as Sinmah Capital Bhd, has entered into a heads of agreement (HOA) to collaborate on the design, construction and operation of up to four centralised labour quarters (CLQs) in the Klang Valley, with a total indicative value of RM600 million.

Rivertree’s wholly owned subsidiary, RSSB Builders Sdn Bhd, will act as the turnkey developer for the proposed facilities, which will have a combined capacity of 28,800 beds, said RSSB in a bourse filing.

The proposed development comprises four greenfield CLQ sites, comprising Q Centre @ Teratai in Meru, Klang, valued at RM171 million.

The remaining three sites in the Klang Valley carry indicative construction values of RM131 million, RM170 million and RM128 million respectively, bringing the total to RM600 million.

The collaboration is undertaken with Asetra Sdn Bhd—an investment vehicle wholly owned, managed and controlled by fund manager Catenary Capital Sdn Bhd—as well as Q Centre (Teratai) Sdn Bhd (QCTSB) and Q Centre Management Sdn Bhd (QCMSB).

Catenary Capital is a fund manager duly registered with the Securities Commission Malaysia and one of the fund managers under Kumpulan Wang Persaraan (Diperbadankan) (KWAP)’s Dana Pemacu initiative.

QCTSB’s principal business activity is investment holding while QCMSB's principal business activity is to operate, manage and provide all ancillary and support services in relation to CLQ facilities.

The proposed collaboration has a related-party element, as Datuk Leong Sai Mun and Datuk Wira Yan Lee Chin—both executive directors and major shareholders of Rivertree—hold 40% stakes each in QCTSB and QCMSB. Datuk Ong Choong Leo, a director and substantial shareholder of Rivertree, holds a 10% stake in both entities.

Rivertree said the indicative contract value is subject to further negotiations and final agreement between the parties.

Pursuant to the HOA, the parties intend to enter into a definitive agreement. The effects of the project will only be determined upon finalisation and execution of the definitive agreement, said Rivertree.

Rivertree’s share price fell 1.33% or half a sen to 38 sen, giving the group's market capitalisation of RM181 million.

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