KUALA LUMPUR – May 8, 2019: Asdion Berhad has entered into a Joint Development Agreement (JDA) with Kingdom Infra Holdings Sdn Bhd, which owns the exclusive operatorship to a supply base in Tumpat, Kelantan.
In its statement today, Asdion, which is an ACE Market listed logistics company stated that under the agreement signed two days ago, it was obliged to rescind the previously-agreed acquisition of Kingdom Infra in March.
However, the terms of the JDA still allow for the salient features of the aborted acquisition such as valuation, profit guarantee and offtake volumes.
The purpose of the JDA is to commence business operations by the second half of 2019.
On top of a guaranteed RM151 million revenue – highlights of the deal include a RM10 million profit guarantee to Asdion for the year 2020.
There will also be a guaranteed minimum 120,000 metric tons of dry bulk offtake per month for five years from the customers at RM21 per metric ton.
Pengkalan Kubor, a town in the Tumpat district which borders Thailand, is the last station to connect the recently revived East Coast Rail Link (ECRL) project.
Indicatively, Phase 1 of the 688km rail line will be from Klang Valley to Kuantan; while Phase 2 will connect Kuantan to Kuala Terengganu; Phase 3 of the project will see the rail line connecting Kuala Terengganu to Kota Baru and finally to Pengkalan Kubor.
Asdion plans to finance the eventual purchase of Kingdom Infra through a combination of internally-generated funds, fund-raising exercises and bank borrowings.