OCK Group unit buys Vietnamese telecom tower firm for US$50m

PETALING JAYA: OCK Group Bhd expects revenue contribution from overseas operations to increase to over 25% next year, following the acquisition of the entire stake in Vietnam's Southeast Asia Telecommunications Holdings Pte Ltd (SEATH) for US$50 million (RM203.85 million).
OCK's indirect 60%-owned subsidiary OCK Vietnam Tower Pte Ltd yesterday signed a conditional share sale and purchase agreement with Vietnam Infrastructure Ltd for the deal.
OCK Vietnam Tower is a joint venture between OCK Group and CapAsia Telecommunications Ltd. Both parties will fork out US$20 million to fund the acquisition, while the remaining US$30 million will come from bank borrowings.
The acquisition will pave the way for OCK to expand into the Vietnamese market, an effort that could help reap higher contribution from the overseas operations, said OCK Group CEO Yap Wai Khee.
Last year, the overseas segment contributed 17% to the group total revenue.
SEATH, with 1,938 telecommunication towers in its portfolio, is Vietnam's largest independent base transceiver station (BTS) owner. It is involved in the development, installation, ownership, operation and leasing out of BTS towers, infrastructure and other related assets.
In 2015, SEATH reported a net profit of US$1.8 million on the back of US$12 million in revenue.
As at end-December 2015, SEATH registered a tenancy ratio of 1.23 times and this is expected to increase to 1.27 times by the end of the year.
"We're even targeting 1.5 to 1.6 times within the next three to four years," OCK founder and group managing director Sam Ooi told a press conference after the signing ceremony here yesterday.
He said there will not be much changes in the management of SEATH following the acquisition.
With this latest transaction, OCK will have about 3,000 tower assets across the Asean region by the end of the year.
Commenting on the group's gearing level, OCK CFO Hillary Chua noted that the debt-to-equity ratio is expected to rise to 0.6 times from 0.27 times as at December 2015.
On the home front, Ooi said, OCK has an order book of 350 new tower sites.
Besides the telecommunication network and services business, OCK is also engaged in green energy and power solutions as well as M&E engineering businesses.
Trading in OCK shares was suspended in the afternoon session pending the announcement. The counter was unchanged at 82.5 sen with some 87,400 shares changing hands.