KUALA LUMPUR (April 21): Tasco Bhd said its unit is investing in a Sabah-based cold chain logistics company as part of its move to expand its presence in East Malaysia.

In a bourse filing today, the group said its 70%-owned unit, Tasco Yusen Gold Cold Sdn Bhd (TYGC), is teaming up with Swift Integrated Logistics Sdn Bhd to jointly acquire Hypercold Logistics Sdn Bhd.

The two buyers will pay RM10.55 million each for the acquisition, said Tasco, adding that TYGC will fund its 50% stake purchase via a combination of advances from Tasco and internally generated funds.

The sellers, it said, are Chan Sun Cheong, Chang Kok Fai and Ong Toh Beng Leong.

Tasco said Hypercold has the largest cold chain warehouse capacity in Sabah, comprising a 3,000 pallet space. It also has eight temperature-controlled trucks in the state.

The group said the acquisition will complement its existing infrastructure to expand its cold chain logistics services to East Malaysia.

The move, it added, is a strategic fit given Hypercold's operational track record of 10 decades when it comes to servicing the food and beverage industry in Sabah.

Tasco said Hypercold reported a net profit of RM971,000 for the financial year ended Dec 31, 2019 (FY19), compared with RM864,000 and RM752,000 for FY18 and FY17 respectively.

The move is subject to approval from banks and financial institutions which have granted banking and credit facilities to Hypercold, if required, and any other relevant authorities.

The acquisition is expected to be completed by the second quarter of this year.

Shares in Tasco closed 3.33% or four sen higher at RM1.24, valuing it at RM992 million. It saw 11.27 million shares done.