KUALA LUMPUR (Oct 9): Engineering services provider AWC Bhd has decided to exercise its call option to buy the rest of rail specialist Trackwork & Supplies Sdn Bhd it does not own for RM5.48 million.

In a statement on Monday, AWC said it had on Oct 9 served a written notice to Trakniaga Sdn Bhd to exercise the call option by requiring Trakniaga to dispose of all the remaining shares in Trackwork. The sale shares represent the balance of 40% equity interest in Trackwork not already held by AWC.

This is in accordance with the terms and conditions of the shareholders’ agreement entered into in February 2018.

AWC currently holds 60% equity interest in Trackwork, whose principal activities include supplying track materials and rolling stock, maintenance of railway tracks, supplying and commissioning of track tools, equipment and machineries, as well as supplying depot equipment, tools and track diagnostics and monitoring systems.

Upon completion of the exercise of the call option slated for the fourth quarter of 2023, Trackwork will be a wholly-owned subsidiary of AWC.

“This will allow AWC to consolidate its investments in Trackwork on a 100% basis and channel all resources towards growing the business of Trackwork. Furthermore, the pick-up in construction activities and large-scale infrastructure projects including but not limited to the Klang Valley MRT3 Project, Penang LRT Project and the reintroduction of Kuala Lumpur-Singapore High Speed Rail project, which are expected to come on-stream within the foreseeable future bodes well for Trackwork,” said AWC.

“Having first forayed into the rail business via our acquisition of the first 60% of Trackwork in 2018, we have come to understand the sector more intimately and are well aware of the challenges and opportunities,” said AWC group chief executive officer and president Datuk Ahmad Kabeer.

“As we exercise the option to acquire the remaining 40% of Trackwork, I am confident that this is the opportune time and will allow us to capitalise on the pick-up in construction activities and large-scale infrastructure projects in Malaysia.

“Notably, with the additional resources at Trackwork’s disposal and the support of the wider AWC Group; we are looking forward to participate in landmark rail projects such as KVMRT3, the Penang LRT Project and the Kuala Lumpur-Singapore High Speed Rail Project,” he said.

Last month, the group announced that it is buying the remaining 49% stake it does not own in automated waste collection system provider Stream Group Sdn Bhd for RM110 million.

AWC had said the proposed acquisitions will allow it to obtain full control in Stream Group to drive its future strategic direction and growth, and enable the group to fully realise all the efforts and initiatives put in place by the company and its management in Stream Group.

Shares in AWC closed one sen or 1.75% lower to 56 sen on Monday, giving it a market capitalisation of RM180.71 million.