KUALA LUMPUR (July 23): YTL Cement Bhd, a unit of conglomerate YTL Corp Bhd (KL:YTL), is planning to buy an 81.34% stake in Singapore-listed NSL Ltd for S$227.61 million (RM792.32 million) in cash, to expand its industrialised building systems (IBS) business.

NSL is a management and investment holding company whose subsidiaries manufacture building materials, oil and petroleum products, and provide environmental services, according to YTL Corp’s bourse filing on Tuesday.

YTL Cement is buying the stake, comprising 303.48 million shares in NSL, from 98 Holdings Pte Ltd, at 75 cents (RM2.61) per share or a total of S$227.61 million. Shares of NSL, which have been declining since mid-2022, last closed near its three-year low of 70 cents.

NSL was in the red in the financial year ended Dec 31, 2023 after two years of profit, with net loss of S$18.7 million (RM65.1 million), dragged by impairment charges.

Its net assets at end-December amounted to 73 cents per share, YTL said.

Upon completion of the acquisition, which is expected to be completed by the fourth quarter of 2024, YTL Cement will be required to make a mandatory unconditional cash offer for the remaining shares in NSL at the same price.

YTL Corp said that YTL Cement intends to maintain NSL’s listing status on the Singapore Exchange.

The group plans to finance the acquisition using internal funds and bank borrowings. As at end-March 2024, YTL Corp’s cash and bank balances amounted to RM1.63 billion, while total borrowings stood at RM45.90 billion.

NSL, said YTL, has completed several semiconductor fabrication plants, data centres and various institutional building projects such as hospitals, and schools in 2023.

The group expanded its prefabricated bathroom unit (PBU) production in Finland to 10,000 bathrooms per year from 7,000 previously, it said.

“The proposed acquisition provides a unique opportunity for YTL Corp Group’s expansion via YTL Cement and its subsidiaries into the IBS sectors in Malaysia, Dubai, Finland and Singapore,” YTL Corp said.

“The precast concrete components businesses are expected to facilitate the speed of construction required in rapidly expanding economic segments such as the data centre industry,” it added.

While the acquisition of NSL will not be reflected in the group’s earnings for the financial year ending June 30, 2025 (FY2025), the group said the purchase will contribute positively to its future earnings moving forward.

The acquisition of NSL comes nearly two months after YTL Corp announced the sale of a 5% stake in Malayan Cement Bhd (KL:MCEMENT) for up to RM325.4 million.

Upon completion of the sale, YTL Cement’s shareholding in Malayan Cement is expected to fall to 73.58% from 78.58%, according to the group's previous disclosure of its shareholding on Jan 23.

Shares in YTL Corp have risen 89% year-to-date and touched a new high this year amid fresh buying interest after the group, via its subsidiary YTL Power International Bhd (KL:YTLPOWR), announced a partnership with US tech giant Nvidia Corp to build a data centre in Johor in December last year.

YTL Corp has a 49.08% direct holding and another 6.49% indirect stake in YTL Power, which has also jumped 90.27% since the beginning of this year.

YLT Corp closed up 16 sen or 4.6% to RM3.64 on Tuesday, valuing the group at RM40.28 billion. YTL Power rose 14 sen or 2.95% to RM4.89, giving the company a market capitalisation of RM40.37 billion.