Property News · April 3, 2016

Red Sea buys Malaysian modular housing builder for $7 million



Red Sea Housing Services Company has announced that its Dubai-based subsidiary has bought a Malaysian company that specialises in building modular housing for US$7 million. The Jeddah-based company said that the deal, under which it will pay an initial $3m in cash and the rest in annual instalments, will boost its plans to expand into the South-East Asian market and allow the company to get its hands on an “unconventional construction technology” that would allow it to build concrete structures of up to 12 floors quickly and using less manpower.
In a statement to the Saudi stock exchange, the company said the deal would add about 100m Saudi riyals (Dh97.95m) to its revenues for this year. The deal will be financed through existing bank facilities and cash flow. AM Modular is a designer and manufacturer of prefabricated modular buildings with three factory sites in Malaysia. The company was set up in 2007 and opened an Australian arm in Ade­laide in 2009.
Don Sumner, the acting chief executive of Red Sea, said: “This is an excellent opportunity for us to continue driving the Red Sea Housing growth strategy along with our new colleagues at AM Modular, while maintaining our technological superiority.”Rick Singh, the chief executive of AM Modular, said: “This acquisition will allow the exponential growth of Red Sea in the Australasian Region. Our strong presence in Malaysia will enable faster delivery to all Red Sea clients and offer a greater range of product.”
Red Sea Housing Services provides temporary and permanent modular housing used by companies to house staff working in remote locations. It has provided accommodation to companies in the mining, oil and gas sectors and recently had a deal with the Australian government to provide housing for asylum seekers at a processing centre in Papua New Guinea. Last month, the company also announced that it had won a contract with the Qatari real estate company Daruna to build accommodation for up to 4,000 people. The contract, worth 144m Qatari riyals (Dh145m), is for accommodation blocks, indoor and outdoor recreation spaces, utilities, retail space, a police station, bank and a clinic.
Red Sea declared a 56 per cent decline net profit last year to 76.1m Saudi riyals. Revenue fell by 7 per cent to 1 billion riyals. Amr Al Dabbagh, the chairman, said the company had been ­affected by lower oil prices, which resulted in some projects being called off and others suspended.mfahy@thenational.aeFollow The National’s Business section on Twitter

Source : thenational.ae
Read more…Red Sea buys Malaysian modular housing builder for million

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