UBG sets aside RM500m for more acquisitions


  • Business
  • Saturday, 02 Feb 2008

KUCHING: UBG Bhd believes the way forward is to grow via acquisitions and it will set aside about RM500mil to acquire more companies.  

But any purchase would likely be made only by the end of the third quarter and “future purchases would have to amplify what UBG has,” deputy chairman Syed Ahmad Alwee Alsree.  

SYED AHMAD ALWEE ALSREE

With this in mind, UBG has identified local and foreign companies but Syed Ahmad declined to disclose details, saying that the priority now was to complete the transaction announced on Thursday.  

To him, the proposed purchase of Loh & Loh Bhd and Putrajaya Perdana Bhd were “standalone” businesses and any new purchases should complement what UBG already has.  

Syed Ahmad and his team are excited about the proposed purchase of the two new companies as it heralds a new direction for UBG given the tremendous growth potential that can be harnessed.  

He is even more thrilled that Abu Dhabi-Kuwait-Malaysia Investment Corp (ADKM) chose to invest in UBG, as this made UBG the only listed local company that has a Middle Eastern investor with a direct stake.  

ADKM will eventually hold no more than 35% stake in UBG and Cahya Mata Sarawak Bhd will have under 40% interest.  

This surely signals a shift in shareholding in UBG from one that is family-linked to institution-based.  

“This shows the power boys of the Middle East have huge confidence in Malaysia’s public entity and it augurs well for the Malaysian economy,” Syed Ahmad said.  

The deal may be good for UBG and the new business puts it on a new platform but there will be challenges ahead.  

Acknowledging this, Syed Ahmad conceded that the timely completion of the purchase of Putrajaya Perdana and Loh & Loh was a huge challenge in itself. 

“Revving up our order book is another huge challenge but we have a vision and a list of projects that we are targeting. We welcome challenges and it will drive us to do better. For us now, the sky is the limit,” he said.  

Syed Ahmad remains bullish of UBG’s prospects and while the deal may look good, the analyst fraternity is still crunching numbers. But those in the know believe that a re-rating is obvious, given the new businesses that UBG will be getting into.  

One thing for sure, the future earnings of Loh & Loh, Putrajaya Perdana and UBG are going to get better with the many projects that Syed Ahmad has on the list that he’s keeping close to this chest for now.  

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