KUALA LUMPUR, March 6, 2015 – In line with its drive to enhance its business prospects and explore new growth opportunities, Boustead Holdings Berhad (BHB) is set to build up its diverse portfolio of property investments with the proposed acquisition of 50% equity in Irat Properties Sdn Bhd.
The acquisition will include two properties in the heart of Kuala Lumpur, namely the Chulan Tower Office Block and The Royale Chulan Kuala Lumpur Hotel. With 100% occupancy rates, the properties are valued at a total of RM508 million.
YBhg Tan Sri Dato’ Seri Lodin Wok Kamaruddin, Deputy Chairman/Group Managing Director, Boustead Holdings Berhad, said, “This is part of our strategic thrust to strengthen our Property Division and improve its earnings potential. For the financial year ended 31 December 2014, the Property Division delivered the highest contribution to the Group, with a profit of RM295 million and a turnover of RM652 million. Complementing our existing prime properties in the city centre, we are confident that the acquisition of these new properties will bring synergies to the Group and add further value.”
In addition to this, the proposed acquisition will see Boustead acquiring a stake in the automated enforcement system (AES). Irat Properties has entered into conditional sale and purchase agreements to acquire 100% interest in ATES Sdn Bhd and Beta Tegap Sdn Bhd. The two companies are engaged in the operation of the AES.
YBhg Tan Sri Dato’ Seri Lodin commented, “Boustead has always been a forward looking conglomerate seeking viable investments. We entered the marine sector with the successful turnaround of the ailing PSC Industries Berhad, to develop what is today an established listed entity known as Boustead Heavy Industries Corporation Berhad. The Group also ventured into the retail petroleum industry with the acquisition of BP petrol stations, which have been rebranded as BHPetrol, Malaysia’s only other home-grown retail petroleum network, which continues to expand its market share.”
“As we look to develop our streams of businesses further and build synergistic opportunities, acquiring a stake in the AES is a natural progression for the Group as we advance on our growth path. The AES has been employed in countries the world over, and it is a proven system that has generated tangible results.”
“As it will be implemented throughout Malaysia, the AES will be a significant contributor in monitoring traffic to reduce the number of accidents and save lives. Malaysia ranks among the top 25 most dangerous countries in the world for road users, with a high rate of fatalities. At the same time, the number of vehicles on the road continues to grow. Clearly, there is a need for a system such as the AES which will encourage road users to drive safely and responsibly.”
“As testament to the effectiveness of the AES, studies conducted by the Malaysian Institute of Road Safety Reseach (MIROS) indicated that there was a decay rate in accident-prone areas where AES was installed, demonstrating a drop in fatal accidents and lower summons volumes. This is certainly a reputable model, and we are confident that this acquisition will be beneficial to the Group in the long term,” concluded YBhg Tan Sri Dato’ Seri Lodin.
The total purchase consideration for the proposed initial acquisition of a 50% stake in Irat Properties is expected to be approximately RM128 million. Upon completion, the remaining equity interest in Irat Properties will continue to be held by existing shareholders, Lembaga Tabung Angkatan Tentera (LTAT) and Irat Holdings Sdn Bhd, while the AES will be jointly managed by BHB and LTAT.
Since its inception as a modest trading entity more than 180 years ago, the Boustead Group has grown by leaps and bounds to comprise more than 90 subsidiaries, associate companies and joint ventures, and has substantial interests in various sectors of the Malaysian economy. The Boustead Group’s operations are focused in six key areas; plantation, heavy industries, property, finance & investment, trading & industrial and pharmaceutical. As at 31 December 2014, Boustead Holdings Berhad’s paid-up capital was RM517 million while its shareholders’ funds stood at RM5.9 billion. Market capitalisation is currently in excess of RM4.8 billion.
Forward looking statements
This release may contain certain forward-looking statements with respect to the financial conditions, results of operations and business of the Group and certain plans and objectives of Boustead Holdings Berhad with respect to these items. By their nature, forward-looking statements involve risk and uncertainty because they relate to events and depend on circumstances that will occur in the future and there are many factors that could cause actual results and developments to differ materially from those expressed or implied by these forward-looking statements.
Issued on behalf of: Boustead Holdings Berhad
By: acorn communications sdn bhd
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