Friday 29 Mar 2024
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KUALA LUMPUR (Apr 28): Boustead Holding Bhd has completed its acquisition of a 50% stake in Irat Properties Sdn Bhd through a third subscription for RM51.2 million.

In a statement, Boustead (fundamental: 0.65; valuation: 2) said today it has subscribed for 24,037,559 new Irat Properties’ shares at the issue price of RM2.13 per share.

In addition, Boustead said the sale and purchase agreement (SPA) for the acquisition of Beta Tegap Sdn Bhd by Irat Properties has become unconditional today.

Both Beta Tegap and ATES Sdn Bhd, the operators of the Automated Enforcement System (AES), are now wholly-owned subsidiaries of Irat Properties.

Boustead deputy chairman and group managing director Tan Sri Lodin Wok Kamaruddin said Boustead is positive the completion of the acquisition will have a beneficial impact on the group’s bottom line, not only in terms of new business but also in terms of improvement to synergy within the group.

In order to facilitate Lembaga Tabung Angkatan Tentera (LTAT) and Boustead’s intention of having joint control in Irat Properties, LTAT is set to enter into a conditional SPA with Irat Holdings Sdn Bhd to acquire the entirety of its 0.43% stake in Irat Properties.

Upon completion of this exercise, BHB and LTAT will have joint control in Irat Properties with a 50% stake each.

According to a filing on Bursa Malaysia today, Boustead said the total cash consideration for the first, second and third subscriptions of Irat Properties’ shares, amounted to RM250 million.

“Pursuant to Boustead’s and LTAT’s intention of having joint control in Irat, LTAT has on April 28, 2015, converted the remaining 512,000 renewable convertible preference shares (RCPS) in Irat Properties into 24,037,559 new Irat Properties shares,” the filing read.

“Following the conversion of the RCPS, LTAT holds in aggregate 116,370,892 Irat Properties shares, representing 49.57% of the issued and paid-up ordinary share capital in Irat Properties.

“LTAT also has on April 28, 2015 subscribed for 1,663,000 redeemable preference shares (RPS) of RM0.01 par value each in Irat, at the issue price of RM100 per RPS for RM166.30 million,” the filing stated.

Subsequently LTAT’s acquisition of one million Irat Properties shares from Irat Holdings, will bring its interest in the former to 50%.

“BHB and LTAT also intend to enter into a shareholders’ agreement to regulate their relationship as the shareholders of Irat Properties. The shareholders’ agreement shall set out their respective commitments, rights and obligations in relation to the management and functioning of Irat Properties and other matters incidental thereto,” Boustead said in the filing.

Boustead had announced on April 15, that it made a capital injection of RM199 million for its proposed acquisition of 50% or 93.33 million shares in Irat Properties, which controls the automated traffic enforcement system (AES).

Boustead’s parent LTAT, and Irat Holdings, held 49.17% and 0.83% stakes in Irat Properties respectively.

Boustead had said in a previous filing that its stake would be made via the capital injection into Irat Properties, whose two subsidiaries, ATES Sdn Bhd and Beta Tegap, jointly manage the AES.

Boustead shares closed 7 sen or 1.52% lower at RM4.53 today, with a market capitalisation of RM4.757 billion.

(Note: The Edge Research's fundamental score reflects a company’s profitability and balance sheet strength, calculated based on historical numbers. The valuation score determines if a stock is attractively valued or not, also based on historical numbers. A score of 3 suggests strong fundamentals and attractive valuations.)

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