KUALA LUMPUR (Dec 20): Shareholders of Opcom Holdings Bhd have approved the proposed acquisition of the entire equity interest in T&J Engineering Sdn Bhd (TJE) for RM90 million, as well as its subsequent proposed diversification into the telecommunication network infrastructure solutions business.

In a Bursa Malaysia filing on Tuesday (Dec 20), Opcom said the purchase price will be satisfied by a combination of cash and new ordinary shares in the group.

"The acquisition of TJE will allow Opcom to gain access to TJE's business and network, and thus expand Opcom's core business to include the telecommunication network infrastructure solutions business, which encompasses but not limited to setting up of new telco related infrastructure, supply chain management, warehousing and network maintenance and other value-added services such as connectivity services, security services, data centres and related internet access to cloud services," said the group's executive director Ong Soon Lim.

He added that the new business venture is complementary and synergistic to its core business of fibre optic cables manufacturing, and is part of its growth strategy of diversifying into income-generating businesses that are profitable and sustainable over the long term.

Meanwhile, Opcom's independent non-executive chairman Datuk Mazlin Md Junid said the purchase of TJE comes with a profit guarantee of RM60 million from the financial year ending March 31, 2023 (FY2023) until FY2025, which gives the group an additional income stream in the near term.

"Additionally, we felt that this was an opportune time owing to the proliferation and inevitability of 5G," said.

According to Opcom, the acquisition and diversification are expected to be completed in the first half of 2023.

At 5pm on Tuesday, Opcom's share price dipped half a sen or 0.68% to close at 73 sen, for a market capitalisation of RM203.73 million.