Wednesday March 14, 2007
Gefung unit buys Turkish quarry firm for RM15.7mil
PETALING JAYA: Marble and granite product manufacturer Gefung Holdings Bhd has bought over a Turkish company that owns extraction rights to two quarries in that country for US$4.5mil (RM15.7mil) cash.
“The acquisition will spearhead Gefung’s venture into upstream operations. This is in line with our expansion,” managing director Jeffery Seo Aik Leong said in a statement.
Seo said the deal would give Gefung full control on the pricing, quality and supply of raw materials.
Raw materials contribute more than half of Gefung’s production costs.
In an announcement to Bursa Malaysia, Gefung said its unit, Syarikat Bukit Granite Sdn Bhd, had entered into a sale and purchase agreement to acquire MONTANA MADENCILIK INSAAT SANAYI VE TICARET LTD SIRKETI (MTN), which is incorporated in Turkey.
MTN posted a pre-tax profit of US$9,873 on revenue of US$50,030 for the year ended Dec 31, 2006, the statement said.
According to Gefung, Turkey’s probable marble reserves is estimated to be about 5.2 billion m³, equivalent to as much as 40% of the world’s total reserves.
Seo said the company would invest RM4.3mil as working capital to enhance the quarry operation in order to raise production capacity. The purchase would be financed by borrowings.
In its financial year ended Dec 31, 2006, Gefung incurred net loss of RM18.7mil on revenue of RM22.2mil, due mainly to the one-time write-off of RM23.8mil as the result of the reverse takeover exercise.
Gefung’s contribution only started in the final quarter of the year.
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