Freight Management Buys TCH Marine Stake
Posted on: Wednesday, 15 February 2006, 21:00 CST
SECOND board-listed international multimodal freight service provider Freight Management Holdings Bhd is taking up a 51 per cent equity interest in established Singapore-based barge and tugboat operator TCH Marine Pte Ltd (TCH).
The move is aimed at expanding and complementing Freight Management's existing rail and air multimode freight services.
Freight Management managing director Chew Chong Keat said the investment is highly strategic as it allows Freight Management to leverage on the cross-selling of TCH's services to our existing large customer base and vice-versa.
"Furthermore, we believe TCH will enhance our future earnings while allowing us to further diversify our activities beyond Malaysia and strengthen our market reach," he said in a statement released in Kuala Lumpur.
Freight Management will subscribe to 1.35 million ordinary shares of S$1 (RM2.28) each to be issued by TCH under its rights issue exercise for a consideration of S$1.35 million (RM3.08 million).
To facilitate Freight Management's subscription of the rights issue shares, it will purchase the rights of Andrew Tay Nguang Yeow in TCH's rights issue exercise at S$700,000 (RM1.6 million). As such, Freight Management's total investment outlay in TCH will amount to S$2.05 million, or around RM4.67 million.
Tay is currently the sole owner of TCH.
TCH's principal activity is the provision of barges, tugboats and other marine services, and now it services the freighting of bulk raw materials between south-west of Thailand, West Malaysia and Singapore through the Straits of Malacca.
Freight Management said there are tremendous synergies to be reaped from the investment, through the effective utilisation of TCH's routing and equipment, and the amalgamation of TCH and Freight Management's market and industry knowledge and other existing resources.
"The investment in TCH is timely and forms part of our strategy to grow earnings via strategic investments, acquisitions or joint ventures. This expansion strategy complements and fortifies the healthy organic growth that our existing businesses are experiencing.
"As a dynamic group, Freight Management will be constantly evaluating business opportunities and potential ventures that are synergistic and can enhance shareholders' value," Chew said.
Source: Business Times; Kuala Lumpur
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