Thursday 28 Mar 2024
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KUALA LUMPUR (Apr 2): Cahya Mata Sarawak Bhd (CMSB) is acquiring a 50% stake in Sarawak-based telecommunications infrastructure and services company Sacofa Sdn Bhd for RM186.79 million or RM4.40 per share.

In a filing with Bursa Malaysia today, CMSB (fundamental: 3; valuation: 1.5) said it has signed a conditional share purchase agreement with the State Financial Secretary (SFS) on behalf of the Sarawak state government for the proposed acquisition.

SFS currently has a 70.51% equity interest in Sacofa, while the remaining shares belong to Celcom Axiata Bhd (15.12%), Sarawak Information Systems Sdn Bhd (7.57%) and Yayasan Sarawak (6.8%). 

"The proposed acquisition is subject to a due diligence and other conditions that are precedent and typical in such cases, and will be funded by CMSB using internal funds and/or borrowings," it added.

"While CMSB understands that our major stakeholders will have many questions about this acquisition, we have no further comment to make until the sale and purchase is concluded, at which time we will make a further statement," said CMSB group managing director Datuk Richard Curtis in a statement today.

On the rationale for the proposed acquisition, CMSB said its board of directors is of the view that it is strategic and Sacofa represents an acquisition that fits into the group’s vision.

“As the business in Sacofa is already income-generating, the proposed acquisition is expected to be income accretive, and is envisaged to increase the overall business profitability of the CMSB," said the group.

Sacofa was granted a 20-year concession to build, manage, lease and maintain telecommunication towers in Sarawak on March 5, 2002. It currently operates more than 600 telecommunications towers.

"Sacofa leases its towers to the local telecommunication players such as Celcom, DiGi and Maxis. Sacofa has strong earnings visibility due to its position as the sole provider of telecommunication towers to telcos in Sarawak, which provides the company with high visibility on future revenues," said CMSB.

CMSB added that the proposed acquisition is expected to increase the future earnings and the earnings per share of the group for the financial year ending Dec 31, 2015 as the transaction is expected to be completed by the second half of this year. 

(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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