KL in US$1b takeover bid

KL in US$1b takeover bid

KUALA LUMPUR (AFP): The Malaysian government on Monday announced a takeover bid worth almost $1 billion for a unit of the country's most indebted conglomerate Renong Bhd -- the first step in taking control of the entire group.

Khazanah Nasional Bhd, the government investment arm, announced an offer for all shares in United Engineers Malaysia Bhd (UEM) at 4.50 ringgit (US$1.18) a share.

If the takeover is successful, construction giant UEM will be taken off the Kuala Lumpur Stock Exchange (KLSE).

UEM has a 32.6 percent stake in Renong, which in turn has a 37.1 percent stake in UEM.

Renong, once the investment arm for Prime Minister Mahathir Mohamad's ruling party, has some 13 billion ringgit in outstanding group debt.

It has interests in banks, toll roads, oil and gasfields and real estate and is Malaysia's most debt-burdened conglomerate as well as one of the largest.

Its massive debt burden has been a major deterrent to Malaysian efforts to attract foreign investors into its stock market.