Fututech to buy two construction firms for RM380 million

PETALING JAYA: Fututech Bhd's major shareholder Datuk Tee Eng Ho will inject RM2.25 billion worth of jobs into the company with the acquisition of two construction companies for RM380 million.
Fututech had on Friday signed a heads of agreement with its major shareholder, Datuk Tee Eng Ho, Datin Toh Siew Chuon and Tee Eng Seng to start exclusive negotiations for the proposed acquisition of Kerjaya Prospek (M) Sdn Bhd and Permatang Bakti Sdn Bhd.
"The total indicative purchase consideration of RM380mil for the proposed injection has taken into account of the aggregate profit guarantee of RM150 million provided by the vendors for the financial years ending 2015, 2016 and 2017 on cumulative basis," it said.
Under the corporate exercise, Fututech would issue 280 million new shares of 50 sen each at RM1.16 per share and the balance in cash.
The issue price per Fututech shares of RM1.16 was arrived at based on a 9.21% premium to the 30-day volume weighted average market price of the Fututech shares up to the market day preceding the date of the agreements.
Fututech said the total indicative purchase consideration of RM380 million did not include certain identified assets or projects owned by Kerjaya Prospek and Permatang Bakti.
The two companies are involved in building construction with current confirmed order book of about RM2.25 billion.
Tee Eng Ho, who is the executive chairman of Fututech, said "I have always wanted to build a sizable construction flagship and I am optimistic that now is the right time to carry out the amalgamation exercise.
"The proposed injection, once concluded will present Fututech Group with an enlarged construction order book of more than RM2.3 billion and contribute positively to the future profitability of the Fututech Group" he said.
Fututech said it may consider funding the cash payment for the acquisition via internally generated funds, borrowings and/or fund raising via issuance of new shares.