UBG targets RM3b order books

  • Business
  • Saturday, 02 Feb 2008

KUCHING: UBG Bhd believes it can double the order books of both Loh & Loh Corp Bhd and Putrajaya Perdana Bhd in a little more than a year. It has a viable platform that would enable the Sarawak-based company to expand its reach to new markets and sectors. 

“We are fairly confident that we can at least double the (total) order books to RM3bil in the near term from over RM1.5bil now,” UBG deputy chairman Syed Ahmad Alwee Alsree said. To him, the near term is a year to 1½ years. 

"We are transfering from a predominantly Malaysia-based company to one that is... getting a presence in GCC countries" - SYED AHMAD ALWEE ALSREE

UBG’s new target market is Peninsular Malaysia, South-East Asia and the Middle East and it wants to play a part in the country's various economic corridor developments. 

The company believes it can take advantage of the vast opportunities since it has a new shareholder that provides the Middle East link. Moreover, it has two local listed companies with expertise in many sectors, ranging from construction, infrastructure, water, energy to the environment. 

“We are transforming from a predominantly Malaysia-based company to one that is forward-looking and getting a presence in GCC (Gulf Cooperation Council) countries, especially in Abu Dhabi, the United Arab Emirates and Kuwait,” Syed Ahmad said in Kuching yesterday. 

He does not rule out the possibility of the two companies' order book even tripling over time, given UBG's huge capacity and financial strength. 

“At any one time, UBG would be able to undertake RM2bil to RM3bil worth of projects,” he said. He also cautioned that UBG did not want to “bite off more than it can chew'' although the group had a voracious appetite. 

A few years ago, UBG made headlines when it bought a 31% stake in Rashid Hussain Bhd (RHB) only to divest that stake in May last year, making a huge gain. 

The group has been on the lookout for a new core business for nearly a year to secure its future income and avoid being categorised as a PN17 company. UBG began working on the deal, announced on Thursday, only a month ago. 

On Thursday, UBG announced it was proposing to buy Abu Dhabi-Kuwait-Malaysia Investment Corp’s (ADKM) 37.6% stake in Loh & Loh and 49.2% in Putrajaya Perdana respectively for RM4.85 per share in cash. It is also buying over CMS Roads Sdn Bhd and CMS Pavement Tech Sdn Bhd. 

Together with Cahya Mata Sarawak Bhd (CMSB) unit PPES Sarawak's order book of over RM1bil, the group’s order book will balloon to nearly RM3bil. 

Syed Ahmad said Loh & Loh and Putrajaya Perdana were “well-run companies'', “not too big but just nice” and just waiting to be picked. They also synergised with UBG’s future growth plan. 

“We can incentivise. They would be ready for explosive growth as there is tremendous growth potential going forward,” he said. 

Part of the exercise will also see UBG getting ADKM as a new shareholder. UBG chief financial officer Ian G. Sadler said ADKM and CMSB would have no more than 35% and 40% interests in UBG upon completion of the exercise. 

ADKM would have two board seats. Syed Ahmad believes the representatives would help steer UBG in the Middle East market where the construction and infrastructure sectors are booming. 

He assured that the change in ownership at Loh & Loh and Putrajaya Perdana did not signal a change in the management of the companies. 

He said UBG believed in finding a winning formula not just in the way these firms would be managed but also in the bidding for projects so that one complemented the other. 

While UBG was “gunning for projects, there would clearly be no conflict as the UBG board would have a clear focus to direct the companies to specific areas,” he added. 

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