Monday 17 Jun 2024
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KUALA LUMPUR (Oct 30): Ekovest Bhd’s shares slid during early trade on Monday, after it entered into binding heads of merger agreement (HOA) with major shareholders Tan Sri Lim Kang Hoo and sister company Knusford Bhd last Friday.

At 12.09pm, the construction group shares fell to a low of 47 sen, from its opening price of 47.5 sen, with 18.02 million shares changing hands.

Meanwhile, Knusford saw its shares drop 1.5 sen or 1.78% to 83 sen, compared to its opening price of 86.5 sen with 74,000 shares traded.

Iskandar Waterfront City Bhd (IWCity), which is also connected to the HOA, also saw its shares fall 1.5 sen or 2.4% to 61 sen, with 12.54 million shares changing hands.

On Friday, Ekovest announced in a local bourse filing that it is disposing of its entire stake in Ekovest Construction Sdn Bhd (ECSB) to Knusford Bhd for RM450 million.

Knusford, on the other hand, will fund the ECSB acquisition through issuance of new ordinary shares in Knusford at the proposed issue price of 60 sen per new Knusford share.

In a separate local bourse filing on the same day, Ekovest said that it had also entered into a HOA with Kang Hoo to explore and negotiate the purchase of a 70% stake in Credence Resources Sdn Bhd (CRSB) for RM1.15 billion.

CRSB presently holds 63.13% equity interest in Iskandar Waterfront Holdings (IWH), which in turn holds 34.29% equity interest in IWCity.

Ekovest said the rationale of the proposed ECSB-Knusford merger serves to consolidate the construction and construction-related businesses, which are currently owned and controlled by Kang Hoo through Ekovest and Knusford.

“The proposed Knusford-ECSB merger is also aimed at eliminating many of the existing recurrent related party transactions between the two groups moving forward.

“Further, the combination of both construction divisions of Ekovest and Knusford under one roof will also result in synergistic benefits (ie consolidation of resources, workforce and technical expertise of both groups) and further strengthen the order book, financial position and prospects of the combined construction group,” it said.

Edited BySurin Murugiah
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