Friday 29 Mar 2024
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KUALA LUMPUR (Jan 19): Atta Global Bhd has proposed to diversify into property development, construction and property investment, in anticipation of the commencement of a property development project by a subsidiary this year.

The steelmaker said its 55%-owned unit Tetap Gembira Development Sdn Bhd (TGDSB) intends to undertake a mixed development project, consisting of a 23-floor building in Penang. TGDSB’s stake was acquired by the group in 2017 for RM6.19 million.

Work is expected to begin in the first half of 2018 and completed by 2021, Atta Global said in a filing.

Additionally, the steelmaker said that on Jan 9 it purchased 10 units of double-storey bungalows in Seberang Perai for RM10 million.

The property units are intended to be held by the group as long-term investment, it said, adding that the property development project and the property investment projects are expected to contribute 25% or more of the group's net profit.

“The board, having considered various growth options to enhance shareholders’ value and improve financial position of the group, had identified property development, construction and property investment as a new core business to diversify its earnings base and drive the growth of the group,” said Atta Global.

The diversification, it added, will provide an additional source of earnings to improve profitability and reduce the risk of the sole dependency on its existing businesses in steel products manufacturing and trading, as well as letting of industrial and commercial assets.

In December 2017, Atta Global had raised RM97.79 million from the issuance of rights irredeemable convertible preference shares (ICPS) to fund its existing business and for investments in new ones.

Year-to-date, the share price of Atta Global has risen by 6.59%. The counter closed 3.5 sen or 3.74% higher today at 97 sen, giving it a market capitalisation of RM148.33 million.

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