FGB Shareholders Says Yes To RM1.15 Billion Acquisition of PROPEL & OGB

June 26, 2014 Press Release No Comments

KUALA LUMPUR, JUNE 26 – At an Extraordinary General Meeting (“EGM”) held today, shareholders of Faber Group Berhad (“FGB”) voted in favour for the RM1.15 billion acquisition of Projek Penyelenggaraan Lebuhraya Berhad (“PROPEL”) and Opus Group Berhad (“OGB”) from UEM Group Berhad.

The Company’s shareholders also gave their consent on the RM1.03 billion Asset Management Services (“AMS”) agreement entered by FGB’s wholly-owned subsidiary, Faber Medi-Serve Sdn Bhd (“FMS”) with Konsortium Prohawk Sdn Bhd (“KPSB”) which will see it providing AMS for Women and Children’s Hospital (“WACH”), located in Kuala Lumpur over a period of 27 years.

Acquisition of PROPEL and OGB

The EGM’s positive outcome will enable FGB to expand its AFM business which is currently focused in the healthcare sector. Upon completion of the merger and integration, which will see FGB leveraging on the potential synergies such as expertise, market know-how and cost derived from sharing of common resources of both PROPEL and OGB, FGB will be transformed into a total Asset Development & Asset Management company with expertise and presence in the healthcare, infrastructure and commercial sectors.

It will also position FGB as the largest AFM company in Malaysia and bolster its revenue base by leveraging on the strength of the enlarged group to create more business opportunities for the company both locally and internationally.

FGB will acquire PROPEL for a total consideration of RM500 million to be satisfied via a combination of cash payment of RM250 million and issuance of 125,000,000 new FGB shares at the issue price of RM2.00 per share. PROPEL is an infrastructure maintenance company with a strong track record and experience in highway maintenance.

While OGB – an asset development and asset management provider of transportation infrastructure as well as built environment with operations in Malaysia and overseas – will be acquired for a total consideration of RM651 million. The acquisition will be entirely satisfied via the issuance of 325,500,000 new FGB shares at the issue price of RM2.00 per share.

The EGM also saw the shareholders approved for FGB to be exempted from extending a Mandatory Offer on the remaining FGB shares not already held by FGB for the proposed acquisition of PROPEL and OGB.

Pursuant to the above, the resolutions tabled at the EGM has been carried and the deal is expected to be concluded in October 2014, subject to the approval from the Bursa Malaysia, Securities Commission and other regulatory authorities.

AMS Agreement with Konsortium Prohawk Sdn Bhd

During the EGM, shareholders of FGB also voted for the entry into an AMS agreement between KPSB and FMS.

The agreement will see FMS providing AMS for the WACH located in Kuala Lumpur. Services include Facility Engineering Management Services; Biomedical Engineering Maintenance Services; Cleansing; Linen & Laundry Services; Healthcare Waste Management Services; Centralised Management Information System; and to attain, maintain and upgrade ISO 9001:2008, ISO 14000, ISO 50001 and ISO 13485 certifications.

Under the agreement, total fees that will be accorded to FMS for these services is approximately RM1.03 billion over a period of 27 years. FGB’s participation will strengthen the Company’s Integrated Facilities Management (IFM) businesses as well as enable it to capitalise on its current resources and investments cumulated over the years to achieve greater competencies and efficiencies in its IFM operations.

WACH is a 600-bed, 12-storey hospital located within the vicinity of Hospital Kuala Lumpur. Once completed, it will replace the current Maternity Hospital Kuala Lumpur ward and will have modern facilities such as creche/nursery, therapy services, specialist clinic, child development centre, paediatric specialist clinics, women health centre, neonatal intensive care units, obstetric wards, emergency department, multi-level car park, cafeteria, shops and a 20-room medi-hotel.

The AMS Agreement will take effect upon the Concession Agreement becoming effective in the second half of 2016 which is when construction of WACH is expected to complete.