Pesona Metro acquires 51% stake in developer to diversify business

KUALA LUMPUR (July 11): Construction and retail group Pesona Metro Holdings Bhd (KL:PESONA) said it is diversifying into property development by acquiring a 51% stake in a residential high-rise development company in Bukit Jalil for RM40.8 million in cash.

Of the 51% stake in Gaya Kuasa Sdn Bhd, 19% will be acquired from Chin May Yong for RM15.2 million while the remaining 32% stake will be acquired by AM Anugerah Sdn Bhd for RM25.6 million.

Chin’s stake in Gaya Kuasa will be diluted to 49% upon completion of the acquisitions, Pesona Metro said in a filing with Bursa Malaysia. Chin is the wife of Wie Hock Kiong, independent non-executive chairman and major shareholder of Pesona Metro.

Gaya Kuasa is currently developing Residensi Renaisans Bukit Jalil, a development consisting of two blocks of 52-storey apartment buildings.

“The proposed acquisitions will enable the group to immediately benefit from Gaya Kuasa’s ongoing Residensi Renaisans project, which is expected to enhance the future profitability and cash flow of the Pesona Metro group,” the group said.

Pesona Metro plans to finance the acquisition from its own funds and/or bank loans.

Pesona Metro said that following the acquisition, its new real estate development segment could generate 25% or more of the company’s net profit, potentially resulting in the diversion of 25% or more of the company’s net assets in the future.

“The proposed diversification essentially serves to facilitate the implementation of planned acquisitions, the purpose of which is to enable the group to enter new businesses,” Pesona Metro added.

The group said the diversification is expected to be completed in the fourth quarter of 2024.

Shares in Pesona Metro closed at 23 sen on Thursday, down half a sen or 2.13%, valuing the group at RM159.85 million.