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Chin Hin Group Property Bhd (CHGP) said its 65%-owned subsidiary Kayangan Kemas Sdn Bhd (KKSB) is buying a 60% stake in Makna Setia Sdn Bhd for RM9 million cash to diversify into the infrastructure construction industry.

In a statement, CHGP said KKSB had inked a conditional share sale agreement with Makna Setia’s shareholders Liew Jor Ho, Chai Yan Min and Yap Seng Hee on Friday (Dec 10).

The acquisition, expected to be completed by the first quarter of 2022, will allow the group to build its own in-house construction team and provide services in relation to the construction of public infrastructure, which is expected to benefit CHGP in the long run.

It will also add onto the existing order book of Kayangan Emas that is worth RM1 billion, CHGP said. With clients ranging from private property owners to government ministries, CHGP said it has ongoing projects that are mainly in construction and upgrading of hospitals.

“The proposed acquisition will enable CHGP to diversify and tap into the infrastructure construction industry, which is complementary to CHGP’s existing property development business and Kayangan Kemas Sdn Bhd’s construction business. The Proposed Acquisition will not only enable CHGP to have an indirect access to the ongoing and future projects of Makna Setia, but also expand to a wider scope within the construction industry, which includes public infrastructure development such as bridges, railway tracks and highways,” said CHGP executive director Chiau Haw Choon.

“Premised on the above, and given the established business and positive historical financial performance of Makna Setia, the board expects that the Proposed Acquisition will benefit CHGP in the long run and contribute positively towards the future earnings of the Company in totality. Our goal is to transform CHGP into a major property, construction and infrastructure player – therefore this corporate exercise fits into our strategy perfectly,” he added.

Shares of CHGP settled unchanged at 88 sen on Friday, valuing the group at RM383.09 million.

Source: THEEDGEMARKETS, Syafiqah Salim/December 10, 2021

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