KUALA LUMPUR: R & A Telecommunication Group Bhd, which is waiting for the outcome of its appeal to Bursa Malaysia Securities against a de-listing, is eyeing the acquisition of a construction firm as part of its regularisation plan.
In a filing with Bursa Malaysia, the telecommunication industry player said it had signed a memorandum of understanding with Datuk Lau Beng Wei, Lau Beng Sin, Lee Wah Lian and Lee Teck Wee for the proposed purchase of the entire paid-up capital of civil and building contractor Synergy Goldtree Sdn Bhd.
According to R & A, Synergy Goldtree had secured construction contracts with a total value of about RM839mil as at July 31, of which RM784mil was yet to be billed.
As part of the proposed acquisition, the vendors are expected to guarantee a profit after tax of at least RM17.5mil per financial year to be achieved by Synergy Goldtree for two successive full financial years on the completion of proposed regularisation scheme.
Under the share sale agreement, the purchase consideration will be decided based on the sum of about nine to 11 times of the profit guarantee per financial year.
R & A said the final sum would to be determined following the legal and financial due diligence carried out on the target company. The sum will be settled entirely with the new ordinary shares to be issued by R & A.
R & A, provider of turnkey design and engineering solutions for teleconmmunication networks, has posted annual losses since the 2012 financial year.
The company, which is 6.83% owned by information technology-based Nexgram Holdings Bhd
, triggered the initial Guidance Note 3 (GN3) criteria after the auditors expressed a disclaimer opinion on its audited financial statements for the year ended Dec 31, 2014.
In August last year, R&A announced that its major unit R&A Telecommunication Sdn Bhd had defaulted in its repayment of financing facilities, with just over RM30mil being due and owing. The insolvency triggered yet another GN3 criteria.
The securities of the company were to have been de-listed on Sept 19 but Bursa Securities deferred it pending the hearing of R & A’s appeal. However, the regulator has suspended the trading of the company’s securities.
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