Central Global Berhad via its wholly-owned subsidiary, CIC Construction Sdn Bhd (CIC), has entered into a sale and purchase agreement today with RYRT Holdings Sdn. Bhd. to acquire a 70% equity stake in RYRT International Sdn. Bhd. (RYRT) for a total indicative purchase consideration of RM30.1 million to be satisfied wholly via issuance of shares in CGB at the price of RM1.04.
As part of the acquisition, the Group also entered into a profit guarantee agreement whereby RYRT Holdings guarantees that RYRT shall achieve an aggregate audited Profit After Tax of RM43.0 million for a period of 2 years for the financial year ending 31 August 2022 and FYE 31 August 2023.
The acquisition is consistent with the vision and intention of CGB to expand its construction segment into infrastructure projects to create long-term revenue growth and income sustainability.
“CGB had ventured into the construction segment in 2017 and we have recently expanded our construction activities to include infrastructure projects. The opportunities from this sector is very appealing to us. The acquisition of RYRT enables the Group to establish a presence in the construction industry in Sabah,” Mr. Chew Hian Tat, CGB Managing Director said.
“We are excited to include RYRT as part of our efforts to solidify our construction business segment, which will inevitably enhance our revenue and profitability moving forward. We see a huge potential in this company and this is an opportunity for us to embark on with RYRT and elevate the company to another level, be it areas of its business, its approach and also its outlook with the mission to create long-term value for the stakeholders.” Mr. Chew added.
RYRT is an established infrastructure construction player with an extensive clientele. The company’s existing orderbook is approximately RM262 million, with contracts including, among others, a government project referred to as Project Lahad Datu Phase 1 involving the upgrading of water supply infrastructure in Lahad Datu, Sabah. Its headquarter is in Kota Kinabalu.
