Ho Hup pays RM6.95 million for rock-quarrying venture

PETALING JAYA: Ho Hup Construction Company Bhd, via its subsidiary Ho Hup Ventures (Malacca) Sdn Bhd (HHVM) is paying RM6.95 million to obtain rock quarrying rights to complement its ready-mixed concrete business.
Yesterday it announced that it would pay RM2 million cash to three parties, namely, Ong Chin Cheong, Ong Chin Yet and Noor Azman Nordin, for 100% equity interest in Erakuasa Global Sdn Bhd (EGSB).
EGSB owns 75% equity in ACV-ICM Quarry Sdn Bhd (AIQSB), which is involved in the business of rock quarrying.
In the announcement, Ho Hup said HHVM will also pay Hong Leong Bank Bhd (HLB) RM4.95 million by Jan 29, 2016 as full and final payment of the judgment debt owing by AIQSB to HLB.
Ho Hup said it completed the acquisition yesterday, adding that the RM2 million purchase price would be satisfied entirely via bank borrowing. It said the acquisition is in line with the group’s and its subsidiaries’ strategy to acquire suitable quarries to complement its ready-mixed concrete activities.
“The quarry’s location is deemed strategic, being located about 5km from the North–South Expressway from the Alor Gajah/Tampin interchange.
“It is envisaged that with a 15-20km proximity to Malacca City the quarry offers potential to supply quarry products to the Malacca City locality,” Ho Hup said in its announcement.
ICM Industries Corporation Bhd has a power attorney to deal with a 102.30ha piece of leasehold quarry land. ICM has undertaken to obtain an extension of 30 years upon the expiry of the lease of the quarry land on March 25, 2028.
Ho Hup aid the acquisition will not have any effect on its issued and paid-up share capital, as it does not involve the issuance of new ordinary shares in Ho Hup.
The Ho Hup group provides foundation and civil engineering, constructs building, and leases plant and machinery. Through its subsidiaries, it develops property, manufactures and distributes ready-mixed concrete, and engineers, constructs and commissions pipeline system.
Ho Hup shares closed unchanged at RM1.06 yesterday, with some 1.5 million units traded.