Wednesday, December 6, 2017

The CRRC-Ireka deal looks interesting

If one is to look at some of the tie-ups between Chinese large organizations and Malaysian companies, they are not between a giant and the largest of Malaysia construction or material companies.

Just recently, CRRC signed an MoU (yet to be confirmed) with Ireka (a smallish construction, property company with market capitalisation of just above RM100 million but with experience of 50 years) for the following.

Looking at CRRC which is the largest manufacturer of trains, it seems that it is not a just-for-show MoU. (There are some MoUs which are created just for announcements.) The fact that the size of CRRC which is a RMB224 billion revenue company, I do not think they will sign an agreement just like that.

Besides that, CRRC is putting in around RM9.2 million for a 8.48% equity stake which shows their seriousness in getting the deal to be done.

What is interesting is that with many rail projects in the plan in Malaysia and CRRC already having its foothold here, this deal could be an impetus for Ireka after being a non-covered company for a long long time.

One can find the announcements here, or for the press coverage here.

But these are very early days still.

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