KUALA LUMPUR: Gagasan Nadi Cergas Bhd has proposed the strategic acquisition of a student hostel asset management concession valued at RM185 million. Group managing director Datuk Wan Azman Wan Kamal stated that this move aims to bolster the group’s concession and facility management operations, which are crucial for ensuring a steady stream of recurring income.
According to BERNAMA News Agency, Gagasan Nadi Cergas plans to undertake a corporate exercise to gain full control of Konsortium PAE Sepakat Sdn Bhd (KPSSB). This involves acquiring KPSSB’s two shareholders, Serata Ehsan Sdn Bhd (SESB) and Seri Delima Anggun Sdn Bhd (SDASB). The acquisition is expected to enhance the group’s revenue and earnings base through sustainable income and cash flows from the concessions under KPSSB.
SESB, through its subsidiary PAE Builders Sdn Bhd, holds a 44.4% equity interest in KPSSB, while SDASB holds the remaining 55.6%. Gagasan Nadi Cergas plans to sign two conditional sales and purchase agreements to acquire the ent
ire equity interest in SESB for RM80 million and in SDASB for RM105 million.
KPSSB has entered into concession agreements with the Malaysian government to develop and maintain student hostels at seven polytechnic campuses until 2036. These campuses are located in Banting, Ipoh, Port Dickson, Johor Bahru, Seberang Prai, Jeli, and Kota Bahru. Each campus is served by a special-purpose vehicle company owned by KPSSB, with Henry Butcher Malaysia (Mont Kiara) Sdn Bhd appointed as the third-party asset management service provider.
Wan Azman emphasized that the acquisition is value accretive, citing a 19.1% discount on the purchase price relative to the book value. Additionally, KPSSB recorded a profit after tax of RM14.1 million for the financial year ending December 31, 2023, which will yield approximately 7.0% annually.
Gagasan Nadi Cergas’s facility management and utilities segment is complemented by its construction and property development segments. The construction segment holds an order book of about RM47
8 million, while the property development segment is working on 6,000 ‘Rumah Idaman’ affordable housing units in Bukit Jelutong and Kwasa Damansara, and over 1,000 Idaman Amani affordable housing units in the City of Elmina.