Diversified group Kumpulan Perangsang Selangor Berhad announced yesterdaythat it had raised its shareholdings in KPS-HCM Sdn Bhd (KPS-HCM) to hold majority stake in the company that does infrastructure works and road maintenance.
KPS-HCM is involved in road and highway construction as well as road maintenance and rehabilitation in the State of Selangor. The company is a partnership between KPS and HCM Engineering Sdn Bhd (HCM Engineering), a subsidiary of Protasco Berhad.
Prior to this corporate exercise, KPS and HCM Engineering held 30.0% and 70.0% stakes respectively in KPS-HCM. With this, KPS had subscribed to an additional 1.715 million shares for total consideration of RM1.715 million to increase its shareholding to 51.0%. Resulting from the increase in stake, KPS-HCM will become a subsidiary of KPS upon completion of the subscription of shares.
KPS-HCM has recently been awarded by Central Spectrum (M) Sdn Bhd a total contract sum of RM174.4 million to undertake the proposed infrastructure works for the development of Phase 3C, Lot 74079, Pulau Indah Industrial Park, Pulau Indah (the Works). The Works are to be completed within 18 months commencing from 5 July 2017 to 5 January 2019 and are expected to contribute positively to the results of KPS Group for the financial years ending 31 December 2017 to 2019.
“Holding a majority stake in KPS-HCM enables us to steer its future growth direction and consolidate its future results into the Group’s top and bottom lines, compared to only equity-accounting its share of profits as an associate,” said Ahmad Fariz Hassan, Chief Executive Officer of Kumpulan Perangsang Selangor.
“In fact, this newly-secured contract spurs us to continue tendering for similar projects in order to sustain the performance of our infrastructure and utility segment going forward.”
“We envisage for KPS-HCM to move beyond its existing scope of road construction, maintenance, refurbishment and rehabilitation, to provide general civil engineering works, building construction and maintenance for both public and private sector.”
This move was in line with the Group’s direction under the Strategic Business Plan where KPS would hold a majority stake in companies under its portfolio, and harness their potential for future expansion.
KPS had undertaken a similar exercise in 2016, where it increased its shareholding in Aqua-Flo Sdn Bhd to hold a direct 51.0% stake, from an indirect stake of 36.0% equity in the water treatment chemicals and equipment trader. Aqua-Flo had secured three contracts with a cumulative total of RM98.1 million in May 2016, to be delivered over a two-year period.