KUALA LUMPUR (Sept 13): HHRG Bhd — formerly known as Heng Huat Resources Group Bhd — has entered into an agreement with several shareholders of Kulim Property Sdn Bhd (KPSB) to acquire KPSB’s entire equity of 1.18 million shares for RM4.5 million.

According to the company’s bourse filing, the acquisition was valued at RM4.5 million and is considered a related party transaction as the shareholders of KPSB are also major shareholders of HHRG.

The acquisition by HHRG, via its wholly-owned subsidiary HH Properties Kulim Sdn Bhd, involves KPSB shareholders including father-son directors Goh Boon Leong and Goh Vincent, as well as Ho Whye Chong and Kelvin Tan Chun Khai.

As at June 20, Boon Leong owned a combined direct and indirect stake of 30.41% in HHRG, and Vincent a 30.21% indirect stake, while Ho owned a combined direct and indirect stake of 9.12%, and Tan a 1.19% direct stake.

The acquisition by HH Properties involves purchasing Vincent’s 400,000 (34%) shares in KPSB, Boon Leong and Ho’s 300,000 shares (25.50%) each and Tan’s 176,471 shares (15%).

The acquisition will be funded through internal funds and borrowings, with the exercise expected to be completed by March 31, 2024.

KPSB is principally involved in the development of building projects for its own operation, such as the renting of space in buildings. Its land parcels include 55 subdivided land plots in Kulim, Kedah, including several industrial, commercial, residential and TNB substations land plots.

“Upon completion of the acquisition, KPSB shall become a wholly-owned subsidiary of the company,” HHRG said, adding the acquisition would enable the group to increase its landbank, in line with its diversification into the business of property development and is expected to contribute positively to the future earnings of the group.

HHRG’s shares closed one sen or 4.35% lower to 22 sen on Wednesday, valuing the group at RM189.91 million.