MRCB eyes Indonesia, Thailand

KUALA LUMPUR: Construction and property company Malaysian Resources Corp Bhd (MRCB) is looking for new partners and potential merger and acquisition (M&A) targets in Indonesia and Thailand to expand regionally, said its executive director Imran Salim.
“We have been studying the Indonesian and Thai markets for quite some time. We’ve been talking to parties there and see whether we can do any acquisition of land or (do) joint development,” Imran told reporters at the company’s EGM yesterday.
“We are also looking for partnerships (there) to bring them back here. So it’s a vice versa business strategy that we’re going for,” he added.
Imran said he expects to enter the property and construction business there sometime in 2017, adding that it is in the process of ensuring that the company identified is safe to invest in.
“We have spent incredible time and efforts in those countries, as the land there are very regulated. But the business is good there and 2017 will be a good time. We should see this bear fruit in a year’s time,” he added.
For 2016, Imran said MRCB will continue its efforts to simultaneously grow its business and pare down its debts.
MRCB has reduced its debts to RM3.06 billion as at September 2015, through a series of asset disposals. Its net gearing now stands at 1.12 times, down from 1.74 times in September 2013.
“It is a balance that we need to strike. We need to grow our business and at the same time we need to pare down our debts.
“We also need to be certain on our growth locally, in order for us to sustain our future investments,” Imran said.
MRCB’s order book currently stands at RM10 billion, excluding light rail transit projects. which will keep it busy for 10 to 15 years more.
Earlier, Imran said MRCB’s shareholders agreed to a proposed private placement at the EGM, paving the way for much-needed funding for the development of its ongoing projects and to expand its landbank.
The private placement, which would raise up to RM612 million, will also indirectly bring down its gearing level, as some of the proceeds will be used to repay its borrowings.
Imran explained however that the main objective of the exercise is to lift MRCB’s bumiputra shareholding to meet the minimum 35% required to be recognised as a bumiputra-controlled public listed entity.
“Our objective for the private placement is to achieve bumiputra status that will allows us to participate in bumiputra tenders and make us more competitive in the market,” he said, adding that it is looking for more infrastructure contracts, including rail and highway projects.
MRCB’s net profit for the third quarter ended Sept 30, 2015 plunged almost 79.4% to RM5.64 million from RM27.39 million a year ago, due to lower contribution from other operating income and higher tax expenses.
MRCB shares closed 2.31% or 3 sen lower at RM1.27 yesterday, with some 1.49 million units traded.