KUALA LUMPUR (Feb 14): WZ Satu Bhd says its acquisition of Cekap Semenanjung Sdn Bhd for RM30 million is “reasonable” as it will provide an avenue for it to increase its orderbook to RM1.4 billion from RM931.8 million as at August 31, 2016.
“The enlarged order book is expected to increase WZ Satu’s future revenue from its civil engineering and construction division.
"As such, the purchase consideration is reasonable as the proposed acquisition, if completed, is expected to contribute positively to the future financial performance of the company,” WZ Satu said in a bourse filing this evening.
Cekap Semenanjung is a construction company that owns Sinergi Dayang Sdn Bhd, which in turn only has one project: to design, finance, and construct some 2,462 Perumahan Rakyat 1Malaysia (PR1MA) houses in Kuantan, Pahang.
It is worth noting that WZ Satu’s executive chairman Tengku Datuk Seri Uzir Tengku Ubaidillah is a Pahang royal family member, and cousin to Pahang Crown Prince Tengku Abdullah Sultan Ahmad Shah.
WZ Satu said Cekap Semenanjung’s price tag of RM30 million was arrived at on a willing-buyer willing-seller basis after taking into consideration Sinergi Dayang’s appointment as the contractor for the PR1MA housing projects with a construction contract value of RM503.2 million.
“In addition, the board of directors has also considered the earnings to be derived from the project after taking into consideration the estimated costs of constructing 2,426 PR1MA homes, together with all the necessary amenities, utilities, facilities and infrastructures, and 69 retail outlets,” WZ Satu said.
WZ Satu also clarified that as of now, Sinergi Dayang has not fulfilled all the conditions stipulated under the Master En-Bloc Purchase Agreement it inked with PR1MA Corp Malaysia and the proprietor as it is currently in the process of obtaining the necessary development order and approval for the housing project’s building plan.
“The relevant documents for the purpose of fulfilling the MEBPA Conditions will be submitted to PR1MA Corp once the development order and building plan approval have been obtained,” WZ Satu said, adding that PR1MA Corp has granted WZ Satu with a third extension for three months until March 18, 2017.
WZ Satu had on Feb 10, 2017 announced via Hong Leong Investment Bank Bhd that it plans to buy the entire 500,000 shares in Cekap Sinergi for RM30 million.
Cekap Semenanjung is owned by Kong Yew Foong and Tan Sri Kong Hon Kong, the founder and boss of bereavement care group founded Nirvana Asia Group, the largest integrated death care services group in Asia.
WZ Satu is involved in mining, infrastructure, steel manufacturing and oil and gas.
Separately, WZ Satu said Uzir, has continued to push up his shareholdings in the company, and bought 393,000 shares at RM1.175 apiece yesterday, giving him control over 26.94% of the company.
Uzir has been upping his stake steadily since he emerged as a substantial shareholder in the company since August 2013, with a 11.04% stake.
Based on WZ Satu’s closing price of RM1.19 today, which was unchanged, Uzir’s 26.94% stake – equivalent to 93.996 million shares – is worth RM111.86 million.