Coastal Contracts acquires stake in Sabah-based firm for RM18.98mil

KUALA LUMPUR: Coastal Contracts Bhd is acquiring an 82% stake in Sabah-based Jewel Of Mabul Development Sdn Bhd (JOMD) for RM18.98mil as part of its growth strategy to diversify its income stream and venture into the tourism industry.

In a filing with Bursa Malaysia, Coastal Contracts said its wholly-owned subsidiary, Coastal Hospitality Holdings Sdn Bhd (CHH), had entered into a share sale agreement and a shareholders agreement to acquire 100,000 shares in JOMD from Richard Christopher Barnes.

Under the terms of the agreement, CHH will also subscribe another 1.72 million ordinary shares in JOMD.

Upon completion of the acquisition, JOMD will allot new shares and CHH shall subscribe to new shares for a subscription consideration of RM16.02mil.

“JOMD shall be an 82%-owned subsidiary of CHH,” said Coastal Contracts.

According to the company, JOMD is the registered owner of a parcel of land measuring 31.15 hectares situated at Pulau Mabul in Semporna, Sabah.

It said JOMD is undertaking the development of an overwater bungalow resort on the land.

“In line with Coastal group’s objective and strategy to deliver long term sustainable growth and value creation to its shareholders, this acquisition is part of its growth strategy to diversify its income streams by identifying and engaging in new viable business.

“The acquisition will provide an opportunity for Coastal group to venture into the tourism industry, which is expected to fully recover to pre-pandemic levels in 2024.”

Additionally, Coastal Contracts said the diversification is also in line with its climate transition roadmap which would substantially reduce its carbon footprint in its journey to Net Zero by 2050.