CMSB to buy telco firm for RM186.79m

PETALING JAYA: Cahya Mata Sarawak Bhd (CMSB) is buying a 50% stake in Sacofa Sdn Bhd, a Sarawak based telecommunications infrastructure and services company, for RM186.79 million.
In a filing with the stock exchange, CMSB said it had entered into a conditional share purchase agreement with the State Financial Secretary, on behalf of the state government of Sarawak, for the proposed acquisition.
CMSB said the acquisition will be funded internally and/or through bank borrowings.
"While CMSB understands that our major stakeholders will have many questions about this acquisition, we have no further comment to make until the sale and purchase is concluded, at which time we will make a further statement," said CMSB group managing director Datuk Richard Curtis.
CMSB said the acquisition fits into CMSB's business in the infrastructure and economic developments in Sarawak.
"As the business in Sacofa is already income-generating, the proposed acquisition is expected to be income accretive, and is envisaged to increase the overall business profitability of the CMSB. In view of the above, the board believes that Sacofa will contribute positively to the operations of the CMSB group," it noted.
Sacofa was granted a 20-year concession to build, manage, lease and maintain telecommunication towers in Sarawak by the state government of Sarawak on March 5, 2002.

"Although there is a finite life to the concession agreement, Sacofa currently operates more than 600 telecommunications towers and this serves as a strong deterrent to any potential new market entrants in assessing the potential investment requirements to compete with Sacofa," CMSB added.
According to the announcement, Sacofa leases its towers to the local telecommunication players, including Celcom, DiGi and Maxis.
"Sacofa has strong earnings visibility due to its position as the sole provider of telecommunication towers to telcos players in Sarawak provides the company with high visibility on future revenue," CMSB said.