KUALA LUMPUR (Dec 12): Minetech Resources Bhd has proposed to acquire a 60% stake in quarry operator Bertam Capital Sdn Bhd (BCSB) for RM16.8 million from Bertam Roadbase Sdn Bhd (BRSB).

In a a filing with Bursa Malaysia, Minetech said the acquisition will be fully satisfied via an issuance of 120 million new Minetech shares to BRSB at an issue price of 14 sen per share.

BCSB has the exclusive mining rights to a granite quarry in Nilai, Negeri Sembilan, the group said, adding that the acquisition would be able to immediately contribute positively to Minetech and complement its existing operations. 

Minetech said BCSB recorded a profit after tax of RM1.76 million in its financial year ended Aug 31, 2017.

The board noted the share issuance would be appropriate in order to avoid material impact on the cash flow and gearing of Minetech.

“In addition, this will allow BRSB to participate in the equity of the company, as well as continue to maintain a minority stake in BCSB,” the filing added.

The purchase consideration was arrived at on a willing-buyer, willing-seller basis and is an approximate 1.75% discount to the fair market value of BCSB’s quarry operations, which stands at RM17.1 million for the stake, Minetech said.

According to a professional geologist with Tropicrop Management Services Sdn Bhd, the valuation was made based on the remaining rock reserves at BCSB’s quarries, which are estimated to sustain its operations for another 27 years.

Shares in Minetech closed up 1 sen or 7.14% at 15 sen today, giving the group a market capitalisation of RM109.74 million.