Forum : Stock: [RA]: R&A TELECOMMUNICATION GRP BHD

R&A Telecommunication to buy stake in construction firm
Posted on 14 October 2016 - 05:39am
sunbiz@thesundaily.com
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PETALING JAYA: R&A Telecommunication Group Bhd, a Guidance Note 3 (GN3) company, which is buying time to submit its regularisation plan, proposes to acquire the entire stake in Synergy Goldtree Sdn Bhd (SGSB) for an undisclosed amount.

The company had requested for a time extension from Bursa Malaysia to submit its restructuring plan, which was supposed to be submitted by Sept 4.

The regulator vide its letter dated Sept 5, however, rejected the company’s application to have until Sept 30 to make the requisite announcement and to submit the regularisation plan by Oct 31.

R&A subsequently submitted an appeal application to Bursa Malaysia, but is yet to be notified of its decision.

In a filing with the stock exchange yesterday, R&A said it had entered into a memorandum of understanding with the vendors in respect of the acquisition of SGSB.

SGSB is involved in the construction industry as a civil and building contractor. It has secured construction contracts with a total value of about RM839 million (of which RM784 million has yet to be billed) as at July 31, 2016.

R&A and the vendors have jointly agreed to commence discussions and negotiations.

The vendors shall guarantee a profit after tax of at least RM17.5 million per financial year to be achieved by SGSB for the successive two full financial years upon the completion of proposed regularisation scheme.

kerelbort

105 posts

Posted by kerelbort > 2016-10-14 10:20 | Report Abuse

Sounds good.

monreyes

892 posts

Posted by monreyes > 2016-10-14 10:22 | Report Abuse

Promising.....

kerelbort

105 posts

Posted by kerelbort > 2016-10-18 15:21 | Report Abuse

monreyes. why withdraw previous comment? i kinda like where it heading if it were true.. :P

monreyes

892 posts

Posted by monreyes > 2016-10-18 15:45 | Report Abuse

ha..ha...

monreyes

892 posts

Posted by monreyes > 2016-10-18 15:49 | Report Abuse

Lee Wah Lian one the Director is in Indera Persada Sdn Bhd, a subsidiary of Digistar also a Director in Synergy Goldtree.

Below is news in 2013, I supposed project has completed check out Digista forum as well.

PETALING JAYA: The RM280mil bonds issued by a Digistar Corporation Bhd unit have been well received by the market, with the Employees Provident Fund alone taking up a third of the debt papers, people familiar with the transaction said.

The bond issuance is to raise funds to carry out a government project that Digistar’s 40%-owned unit, Indera Persada Sdn Bhd, has already secured, namely, the construction of the Malaysian National Technology Advancement Centre in Alor Gajah, Malacca, for the Works Ministry.

The other buyers of the bonds were the “usual suspects” of insurance companies and other institutional funds, the sources said.

The interest in the bonds can be explained by its good ratings. RAM Ratings Services Bhd has assigned a long-term rating of AA1 with a stable outlook on Indera Persada bonds.

Indera Persada has an 18-year concession from the Government for the Alor Gajah facility, covering a construction period of three years followed by an asset management services period of 15 years. It consists of RM174mil for the construction of facilities and infrastructure, and RM66mil for the provision of information and communications technology (ICT) and lab equipment.

RAM assigned the AA1 rating because the construction risk is largely mitigated by a performance guarantee of RM280mil by United Overseas Bank (M) Bhd for the construction period.

“The performance guarantee largely protects bondholders from the adverse effects of any construction delays.

“In addition, the main contractor for the project, Digistar Holdings Sdn Bhd, would bear any additional costs related to the project, as the design-and-build contract is on a fixed-price, lump-sum basis,” said RAM.

When contacted, Digistar group managing director Datuk Lee Wah Chong said: “This marks Digistar’s entry into property and construction in a significant way.

“While our ICT division has been doing well, for our company to become sizeable, property is our next phase of growth. As we go forward, property would be our main contributor.”

Last year, Digistar launched its maiden serviced apartments in Malacca. At a gross development value (GDV) of RM150mil, The Heritage Service Apartments has recorded a 60% take-up rate so far for its 347 units. Some 30% of the buyers are foreigners.

By Malacca standards, these units are expensive, as prices were transacted between RM930 and RM1,200 per sq ft. The apartments are located opposite the Equatorial Hotel and Dataran Pahlawan, which are considered prime locations in the Malacca city centre. The apartments will be completed by 2016.

“Who says you can only make money selling property in the Klang Valley and Johor? There are many foreigners, particularly Singaporeans, who are extremely keen on property in Malacca,” Lee said.

He said that Digistar was now looking for parcels of land for development in the Klang Valley.

“We would like to embark on a mixed development, comprising residential and commercial. If we can start our first project in the Klang Valley with a GDV of RM1bil, then we are on track to meet our targets,” Lee said.

For the nine months to June 30, 2013, Digistar’s net profit declined 28.4% to RM5.3mil on a 9.47% drop in revenue to RM48.06mil.

Digistar’s associate Indera Persada’s bonds taken up by pension and insurance funds

> EPF takes up one-third of the RM280mil bonds issued

> Alor Gajah, Malacca facility is an 18-year concession agreement covering 3 years of construction followed by 15 years of asset management services.

> Property to be Digistar’s future main business

warrior

609 posts

Posted by warrior > 2016-10-19 10:30 | Report Abuse

Synergy Goldtree is RA's white knight ?

monreyes

892 posts

Posted by monreyes > 2016-10-19 16:53 | Report Abuse

I hope this deal will go through

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