Based on the proposal letter by the Group Executive Chairman and a major shareholder of the Company and a major shareholder of Knutsford, requesting the Company to consider participating in a reorganisation, rationalisation, and merger proposal with Ekovest, both parties have today agreed to a head of agreement.
The merger agreement is to explore and negotiate further on the Proposed Knusford-ECSB Merger via the proposed disposal by Ekovest of its entire equity interest in subsidiary Ekovest Construction Sdn Bhd to Knusford for an indicative disposal consideration of RM450 million, which was arrived at on a willing-buyer, willing-seller basis, after taking into account the audited net assets of ECSB as at 30 June 2023.
The Disposal Consideration shall be satisfied by Knusford on an agreed completion date of the Proposed Knusford-ECSB Merger via the allotment and issuance of such number of new ordinary shares in Knusford to Ekovest at an indicative issue price of RM0.60 per Knusford Share.
ECSB is principally involved in civil engineering and construction works such as turnkey, design and build projects, and project management. ECSB has a track record of completing infrastructure and civil construction-related works with a total contract value of more than RM10 billion to date.
Ekovest, through ECSB, has been subcontracting its construction works to the Knusford Group, as well as purchasing machinery, equipment, and building materials, and renting machinery and equipment from the Knusford Group.
The group believes the proposed merger is also aimed at eliminating many of the existing recurrent-related party transactions between the two groups moving forward. Further, the combination of both construction divisions of Ekovest and Knusford under one roof will also result in synergistic benefits.
