Friday 21 Jun 2024
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KUALA LUMPUR (May 13): Construction group Southern Score Builders Bhd is acquiring a 51% equity stake in electrical contractor SJEE Engineering Sdn Bhd for RM22.95 million cash as the group looks to tap into new market segments within the construction value chain and to expand its income stream.

In a filing with Bursa Malaysia on Monday, Southern Score said it is buying the stake from Ngo Hea Bing, who holds 100% equity interest in SJEE.

According to Southern Score, SJEE possesses expertise in electrical engineering works for turnkey projects.

Besides expanding its income stream, Southern Score said it would also be able to leverage on SJEE’s technical expertise with a track record of more than 30 years in the business to enhance the group's current suite of capabilities to include electrical works, which are currently outsourced to subcontractors.

"Not only will this broaden the group’s presence in the construction value chain, by undertaking some electrical works in-house, the group is expected to benefit from cost-efficiencies and reduce reliance on subcontractors for the mechanical and electrical works of its construction projects," it said.

The acquisition comes with a profit guarantee by Ngo that SJEE will achieve a cumulative profit after tax of not less than RM15 million over three financial years.

As such, the total profit attributable to Southern Score is approximately RM7.65 million over the three years.

The acquisition is expected to be completed by the third quarter of 2024, the group said.

Shares of Southern Score closed unchanged at 46.5 sen at Monday's market close, with a market capitalisation of RM1.05 billion.

Edited ByS Kanagaraju
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