SHARE prices of Sarawak Concrete Industries Bhd (SCIB) had been edging up this week on news that a new substantial shareholder with extensive experience in construction and water infrastructure-related businesses might emerge in the company.
SCIB is being used for the backdoor listing of Negri Sembilan water privatisation concessionaire NS Water Konsortium Sdn Bhd (NSWK).
NSWK holds the exclusive rights to undertake the privatisation of the Negri Sembilan Water Supply Department for 30 years from March 25, 1998.
SCIB share prices, which closed at RM2.37 last Wednesday, rose 12.6% to RM2.67 yesterday.
Sources said the businessman, who had been accumulating SCIB shares from the open market, was negotiating with several SCIB shareholders to acquire their stakes.
The sources also said that the businessman, with more than 30 years' experience in the construction and water infrastructure-related industries, was expected to inject his expertise into the company.
The businessman, who had already accumulated enough SCIB shares to qualify for a director's seat, might request for a director's post when the “time is right.”
According to its filing with Bursa Malaysia on Nov 6 last year, SCIB said it would buy Eurologic Sdn Bhd from three parties for RM175mil, of which it would pay RM10mil in cash and the balance in 73.99 million new SCIB shares.
Eurologic will acquire a 65% interest in NSWK from its current owners, the state foundation trustees.
SCIB will diversify its activities into the sourcing, development, abstracting and treating of raw water and the distribution and supply of treated water and reduce its dependence on the construction industry.
Since treated water is an essential commodity, SCIB's board has anticipated an encouraging prospect for the water supply and treatment business, which would generate a steady income stream for SCIB group and enhance its earnings over the longer term.
For the year ended Dec 31, 2003, SCIB posted pre-tax profit of RM1.02mil on revenue of RM19.97mil, compared with a pre-tax-profit of RM2.02mil on revenue of RM22.2mil in 2002.
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