This article first appeared in The Edge Financial Daily, on April 19, 2016.

 KUALA LUMPUR: Puncak Niaga Holdings Bhd is diversifying into property development as it seeks to acquire the businesses of TRIplc Bhd, a property developer listed on the Main Market of Bursa Malaysia.

In a filing with Bursa yesterday, Puncak disclosed that its executive chairman Tan Sri Rozali Ismail and Central Plus (M) Sdn Bhd are substantial shareholders of both Puncak and TRIplc. Corporate Line (M) Sdn Bhd is also a major shareholder of Puncak and a shareholder of TRIplc. Central Plus and Corporate Line are both linked to Rozali.

Puncak said it yesterday signed a heads of agreement (HoA) with TRIplc to facilitate discussions and negotiations for a potential acquisition by Puncak of the businesses of TRIplc. Under the HoA, both parties have agreed to a period of four months from the date of the non-disclosure agreement, which was executed on the same day, to evaluate the proposal.

“During the due diligence period or [before an] earlier mutual termination of the HoA, Puncak shall be granted exclusivity by TRIplc with respect to the proposed transaction,” said Puncak.

“The company will make further announcements if there is any material development,” it added.

TRIplc is involved in property construction, property development, provision of project management services, property investment and provision of facilities management.

The announcement comes after Puncak’s disposal of its respective stakes in Puncak Niaga (M) Sdn Bhd and Syarikat Bekalan Air Selangor Sdn Bhd in October 2015, following the state government’s move to acquire the water concessionaires in Selangor.

While the group still has its oil and gas (O&G) operations following the sale of its water assets, the slump in crude oil prices had pressured its O&G business, resulting in the group posting a loss of RM126.7 million for the financial year ended Dec 31, 2015, leaving the group without a core business.

For the second quarter ended Nov 30, 2015, TRIplc reported a 20% increase in net profit to RM1.5 million, from RM1.25 million a year earlier, while revenue fell 6% to RM3.44 million from RM3.66 million.

For the cumulative six-month period, net profit climbed 7% to RM5.13 million from RM4.81 million, on the back of a 22% rise in revenue to RM11.67 million from RM9.51 million.

TRIplc’s previous projects included the Taman Puncak Perdana and Perdana Heights developments, as well as Universiti Teknologi Mara’s (UiTM) campus in Taman Puncak Perdana.

Earlier this year, the developer was awarded a 25-year concession for the development of Phase 3 of UiTM’s Puncak Alam campus, with a development cost of RM599 million.

Puncak shares fell three sen or 2.2% to close at RM1.34 yesterday, giving it a market capitalisation of RM599.31 million. TRIplc’s share price, meanwhile, rose two sen or 1.4% to end the day at RM1.41, bringing its market cap to RM93.55 million.