AWC ventures into rail business in RM43.5m deal

AWC also highlighted plans to use Trackworks as a platform to venture into rail asset management.

KUALA LUMPUR: AWC Bhd is venturing into the rail-related business by buying a 60% stake in  Trackwork & Supplies Sdn Bhd for RM43.5mil in cash and new shares.

AWC said on Wednesday it had signed a conditional share sale agreement with seven persons to acquire three million shares. The sellers are Goh Poey Hong, Chong Kim Loong, Goh Tse Woei, Kong Keat Voon, Chong Chong Hong, Lim Huey Yih and Shaun Chan Thiam Eng.

It said the RM43.5mil would include RM20mil cash and the balance RM23.50mil through the issuance of new AWC shares.

It also inked another deal with Trakniaga Sdn Bhd – which owns 40% of Trackwork –to govern the management and operation of Trackwork.

AWC envisages the eventual contribution arising from purchase of Trackwork will be more than 25% of the net profit of the group and will result in a diversification of the existing core business. 

“The sellers have guaranteed that Trackwork will achieve a cumulative profit after tax of RM20mil for the FY endings Sept 30, 2018 and 2019,” it said.