Kejuruteraan Asastera partners local firm to expand into telecoms infrastructure sector

TheEdge Wed, Apr 20, 2022 02:50pm - 2 years View Original

KUALA LUMPUR (April 20): Electrical and mechanical engineering service provider Kejuruteraan Asastera Bhd (KAB) has teamed up with privately held MRH Empire Sdn Bhd to venture into the telecommunication infrastructure sector as part of its plan to grow its recurring income.

In a filing with Bursa Malaysia on Wednesday (April 20), KAB said its wholly-owned subsidiary KAB Telco Sdn Bhd (KABTEL) has entered into a term sheet with MRH to form a joint venture (JV) in respect of the identified projects and prospective projects. Under the JV, KABTEL will hold a 60% stake in the JV company and MRH the remaining 40%.

MRH, which is 99.9% owned by Mohamad Ezzul Na'im Mohd Roahizee and 0.1% by Mohd Rohaizee Hashim, operates a network of multi-operator telecoms towers and provides facilities and services relating to maintenance of telecoms towers, owns the telecoms structure and fibre for in building coverage.

"The JV marks a significant milestone in the development of telecoms infrastructure and telecoms services business for the group's strategy on expanding the group's recurrent income in other ways," said KAB.

"The term sheet is not expected to have any material effect on the group's earnings and earnings per share for the financial year ending Dec 31, 2022, but is expected to contribute positively to the group's future earnings and earnings per share," it added.

In a separate statement, KAB said the JV is its first local partnership to build and operate telecoms towers, adding that it is working closely with its partner to leverage its expertise in the telecoms industry which includes supplying telecoms towers, building fibre optic capabilities and developing in building coverage and small cell.

"MRH has obtained approvals to survey and develop up to 1,342 sites throughout Malaysia for the development of telecoms towers which will provide MRH with the rights to build, own and operate telecoms facilities at all the premises of one of the ministries.

"MRH has also entered into a memorandum of understanding with a local established telecoms operator for joint business participation and cooperation over digital connectivity and infrastructure development for the 1,342 sites," it added.

"This foray is the beginning of a new and exciting chapter for us. Based on the milestones set by the Malaysian government in terms of connectivity, we believe that we are on a path of exponential growth. We expect the development of all the sites to be ready by 2025 and upon the completion of all sites, the expected gross development value will be worth more than RM500 million," said KAB managing director Datuk Lai Keng Onn.

At noon break on Wednesday, KAB shares closed unchanged at 41.5 sen, valuing the group at RM746.2 million. KAB shares have risen 66% year-to-date from 25 sen.

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