SunCon to be taken private


SUNWAY Holdings Incorporated Bhd (SunInc) plans to take its 63%-owned unit Sunway Construction Bhd (SunCon) private in a cash-and-share deal worth RM221.2mil.  

The move was a key part of SunInc's ongoing restructuring exercise to become a more focused conglomerate and part of the group's plans to expand regionally, said SunInc managing director Yau Kok Seng. 

“SunCon is undervalued relative to its business prospects and cashflow, and this exercise will unlock value for SunInc and SunCon's shareholders,'' he told the media in Petaling Jaya yesterday. “The move would also allow SunInc to secure SunCon's robust cashflow of above RM50mil.”  

SunInc proposes to pay RM2.73 for each SunCon share – RM1.10 in cash and one SunInc share at RM1.63.  

Yau Kok Seng

SunInc has also proposed the private placement of up to 10% of the issued and paid-up capital of the company.  

SunCon, which was listed on the main board of the KLSE in 1997, has an outstanding order book of about RM1.5bil, comprising mostly local contracts. 

The company, whose principal activities are in civil and building works, is bidding for jobs worth RM8bil. The consolidated profit after tax and net tangible assets of SunCon and its subsidiaries for the financial year ended Dec 31, 2002, were RM32.5mil and RM261.2mil respectively. SunCon contributed about 60% to SunInc group pre-tax profit last year. 

“We have plans to make SunCon a regional player in the construction industry in Asean countries. We also intend to penetrate the construction market in China. SunInc has trading businesses in India, Indonesia, Thailand, Singapore and Vietnam,” he said. 

On SunInc, Yau said the group was considering going back to the quarrying business, which it had sold a few years ago, to support its building materials division. Eventually, he said, the building materials, construction and trading division of SunInc would be making equal contribution to the group's turnover. 

“We have disposed of all our loss-making businesses,” he added. 

Meanwhile, an analyst said SunCon was the cash cow for the SunInc group with vast opportunities in Malaysia and the region although it was rated lower compared with other more established construction companies.  

 Stock Watch On SUNCON Stock Watch On SUNINC

Article type: metered
User Type: anonymous web
User Status:
Campaign ID: 1
Cxense type: free
User access status: 3

Did you find this article insightful?


Next In Business News

SK Nexilis to build RM2.3bil copper foil facility in Kota Kinabalu�
Gabungan AQRS wins RM83.57mil job
BSL Corp slides over unsuccessful corporate exercise
RGT to speed up expansion as Q2 profit soars on strong export
Duopharma to supply 6.4 million doses of Sputnix V vaccine�
Pharmaniaga signs deal to supply 12 million doses of vaccine to MOH
Indonesia says new sovereign wealth fund attracts USD10b commitment
Disappointing close for Bursa, Public Bank retains part of gains
Jet engine maker Rolls-Royce cuts 2021 forecasts on travel slump
Malaysia's debt securities still attractive even if OPR cut

Stories You'll Enjoy