Managing director Lim Chin Horng said this was part of the company’s efforts to grow its business and diversify its revenue stream.
PETALING JAYA: Econframe Bhd
is proposing to acquire a 70% stake in ETA World Sdn Bhd (ETAW) from ETA Industries Sdn Bhd for RM56mil as part of its move to diversify the group’s business into construction services and property development.
In a filing with Bursa Malaysia, Econframe said RM28.1mil will be satisfied in cash and the remaining RM27.9mil will be satisfied via the issuance and allotment of 30 million new ordinary shares in Econframe at an issue price of 93 sen per consideration share.
Econframe said ETAW is an industrial property builder, providing turnkey solutions, specialising in the design and building of industrial buildings and related activities.
“Presently, the Econframe group is principally involved in the provision of total door system solutions for property development.
“The proposed acquisition represents an opportunity for the group to venture into construction services and/or property development, specifically, into industrial properties in view of the favourable outlook and prospects of the industrial property market in Malaysia.”
Additionally, Econframe said the proposed acquisition will provide the group with an opportunity to diversify its earnings base.
“The proposed acquisition allows the Econframe Group to tap into ETAW’s expertise in the construction and property development of industrial properties, enabling the enlarged group to take advantage and ride on the favourable prospects of the industrial property market.
“The board notes ETAW’s total solution offering which involves the industrial property development play and is of the view that its asset-light approach is a safe way of expanding and participating in the industrial property development theme,” said Econframe.
Separately, in its recently released annual report, Econframe said it is exploring potential export markets to expand its geographical reach beyond the borders of Malaysia.
Managing director Lim Chin Horng said this was part of the company’s efforts to grow its business and diversify its revenue stream. “We have been in active discussions with potential customers and have yielded very encouraging feedback,” he said.
Additionally, Lim said the group will continue to actively explore merger and acquisition opportunities that create synergies and complement the group’s existing business.
“Our focus is on acquiring companies within the value chain that we are in, so that we can further strengthen our position in the industry.
“This is supported by our strong balance sheet with a net cash position that enables us to seize any opportunities that arise.”
According to the group’s annual report, total cash and cash equivalents stood at RM31.7mil as at Aug 31, 2023, compared with RM26.8mil in the previous year.
The company said this was largely due to the proceeds raised from the conversion of warrants.
