20 minutes
PETALING JAYA: DRB-Hicom Bhd entered into a share sale and purchase agreement with Enigma Permata Sdn Bhd to acquire the remaining 49% share in Media City Ventures Sdn Bhd for a cash consideration of RM100 million.
According to the group’s Bursa filing, Media City is principally engaged in construction, operation and maintenance of infrastructure and broadcast system via the concession agreement with the government.
As part of its concession agreement, the company will receive three plots of 99-year leasehold land measuring 9.48 acres in Angkasapuri, Kuala Lumpur upon the completion of the construction work and the completion and commissioning of the new infrastructure.
DRB-Hicom explained that the purchase consideration of RM100 million was arrived at after taking into consideration Media City’s profit after tax and cashflow during the concession period, and the group’s total cost of investment for 100% equity stake of RM185.68 milion – which is within range of the estimated value of the company of between RM167.40 million and RM248.86 million.
Furthermore, it stated that the agreed value of the land of RM186 million represents a 2% discount from the appraised market value of RM190 million by PPC International Sdn Bhd.
The group elaborated as it is the existing 51% shareholder in Media City, the decision behind the acquisition is to enable it to fully consolidate the financial returns from its concession agreement and the potential profitable returns from the development of the exchange land within the medium term.
The proposed acquisition is expected to be completed in June 2020.
