GARMENT maker Baneng Holdings Bhd has bought an engineering and fabrication company for RM800,000 to diversify into the oil and gas sector.
Executive director Albert Lim Meng Hong said Atmos Engineering Sdn Bhd, the firm that it is buying, has secured jobs worth a combined RM20 million from various oil majors, which will bolster Baneng's earnings. Atmos is also bidding for contracts that are worth up to RM200 million in total, he said.
With a paid-up of RM500,000, Lim said, Atmos has had limited resources and needed to tap onto Baneng's access to the capital market as a public-listed company to raise funds for its projects.
He did not elaborate on Baneng's plan to raise money, but said that it is talking to bankers.
"Atmos will contribute to our earnings from next year. We are still negotiating and there will be more acquisitions to come," he told reporters after signing with Atmos in Kuala Lumpur yesterday.
Baneng will still retain its core business of manufacturing, knitting and dyeing of fabrics and other apparels, he said.
"We will position ourselves in garment manufacturing and oil and gas for now, but will still look for any other businesses that can bring in more income," he added.
Baneng has been on the lookout for strategic purchases in the last three years, he added.
Shares of Baneng have risen 59.1 per cent this year, a stark contrast to the 19.7 per cent fall in the Kuala Lumpur Composite Index over the same period.
The usually thinly-traded stock has also seen some active transactions recently.
Baneng closed 1.4 per cent lower at 70 sen yesterday.
Source : Business Times
