KUALA LUMPUR (Oct 21): Sarawak Cable Bhd (SCB) has entered into a sale and purchase agreement with HNG Capital Sdn Bhd to acquire a 100% stake in Universal Cable (M) Bhd and Leader Cable Industry Bhd for RM210 million.

In a filing with Bursa Malaysia this afternoon, SCB said the agreement follows the acceptance of a conditional offer on June 16 and payment of an earnest deposit of RM2.1 million to HNG on Sept 12.

The acquisition consideration is to be settled via a combination of cash, assumption of liabilities and the issuance of 37.6 million new ordinary shares of 50 sen each in SCB at an issue price of RM1.3318 per share, representing 11.86% of the enlarged, paid-up share capital of SCB.

The cash part will be 90% funded from borrowings, with the balance from SCB's internally generated funds.

"The board views the proposed acquisitions as a synergistic and strategic move by SCB to strengthen its manufacturing base and market position within the power transmission industry," it said.

"Post acquisition, the enlarged SCB Group with its enlarged capacity and capability as well as enhanced efficiency and technical capability will be able to embark on projects of increasing scale and complexity in Malaysia and abroad," it added.

Universal Cable and Leader Cable are two major cable manufacturers in Malaysia and have also completed various turnkey projects for the design, manufacture, supply, laying, trunking and erecting of power and telecommunication cables throughout Malaysia.

The proposed acquisitions are expected to be completed by the fourth quarter of this year.