PETALING JAYA: Boustead Holdings Bhd has made a capital injection of RM199mil for its proposed acquisition of 50% or 93.33 million shares in Irat Properties Sdn Bhd, which controls the automated traffic enforcement system (AES).
Boustead’s parent Lembaga Tabung Angkatan Tentera (LTAT) and Irat Holdings Sdn Bhd already hold 49.17% and 0.83% stakes in Irat Properties respectively.
Boustead said in a stock exchange filing that its stake would be made via the capital injection into Irat Properties, whose two subsidiaries, ATES Sdn Bhd and Beta Tegap Sdn Bhd, jointly manage the AES.
The proposed acquisition consists of 60 million new Irat shares for a cash consideration of RM128mil and an additional 33.33 million new Irat shares at the issue price of RM2.13 per Irat share, for a cash consideration of RM71mil.
The capital injection makes the sale and purchase agreement for the acquisition of ATES by Irat Properties unconditional while the acquisition of Beta Tegap by Irat Properties is pending the fulfilment of conditions in the agreement. The move by Boustead would see the company and parent LTAT jointly managing the AES.
“We are especially positive on our prospects in the property sector given the fact that this acquisition includes two properties in the heart of Kuala Lumpur, namely the Chulan Tower Office Block and The Royale Chulan Kuala Lumpur Hotel valued at RM508mil.
“We expect both properties, which enjoy strong occupancy rates, to complement the prime properties under our stable and bring about further improvement to synergy within the group.” said Boustead deputy chairman and group managing director Datuk Seri Lodin Wok Kamaruddin in a statement.
ATES and Beta Tegap currently have a five-year concession to operate and maintain the AES equipment and eventually hand them over to the Road Transport Department at the end of the concession.
Lodin had previously been quoted as saying that the company would be looking at a 12- to 15-year period to run the project, with lower priced summonses.
It has been reported that the rate of return for both the companies would be capped at 17% and remuneration would be based on a three-tier structure. Under the first tier, both companies would be entitled to RM16 per valid summons up to five million summonses.
After reaching more than five million summonses, tier two would kick in, and the additional revenue would be split evenly between the two companies and the Government up to a cap of RM270mil each.
Once the RM270mil cap has been hit, tier three would kick in with the companies each receiving 7.5% from the remaining revenue and the Government the rest.