KUALA LUMPUR: Gagasan Nadi Cergas Bhd (GNCB) is buying Konsortium PAE Sepakat Sdn Bhd for RM158mil which has concessions to build and maintain residential hostels at seven polytechnics in various states of Peninsular Malaysia.
GNCB said on Tuesday it had signed a conditional share sale agreement with P.A.E. Builders Sdn Bhd and Seri Delima Anggun Sdn Bhd to acquire the entire 4.50 million shares which they held in Konsortium PAE Sepakat (KPS).
KPS owns 100% equity interest in seven subsidiaries -- all of which have concessions for 22 years and six months -- with the government to design, construct and thereafter residential hostels. The concessions started on March 25,2013.
KPS was one of the major customers of the company between 2014 and 2016. GNCB’s unit, Nadi Cergas Sdn Bhd, was appointed by the subsidiaries as their main contractor to build the hostels to accommodate 10,000 students in the seven polytechnics.
Currently, the group is the concession holder for the facility management of student hostels of International Islamic University Malaysia (IIUM) in Kuantan and Universiti Teknikal Malaysia Melaka (UTeM).
Since March 26,2019, the group had provided in-house facilities management to Sasaran Etika Sdn Bhd (SESB) which is the concession holder for IIUM, Kuantan.
GNCB said the proposed acquisition would complement the group's current facilities management services, adding that it was in line with the group’s strategy to expand its facility management of student hostels.
“The proposed acquisition will enable the group to participate and be entitled to the future recurring and sustainable income and cash flow streams from the concession over the remaining tenure of the concession. As such, the proposed acquisition is expected to contribute to the future earnings and cash flows of the group, ” GNCB said.
GNCB said the funding for the proposed acquisition would be partially met through a proposed Islamic medium term note programme of RM200mil and a convertible Sukuk programme of RM60mil.