Property development and construction firm Ireka Corp Bhd has teamed up with rolling stock manufacturer CRRC Urban Traffic (Europe) Co Ltd (CRRC UT), a member of the China-based CRRC Group, to venture into rail projects. The Memorandum of Understanding between the two companies foresees collaboration in rail, urban traffic solutions, tourism and infrastructure projects in Malaysia and Southeast Asia.
Ireka and CRRC UT will work together exclusively to explore business opportunities in areas such as logistics, trading of construction and building materials as well as specific rail and infrastructure construction projects.
Simultaneous to the MoU, Ireka had also signed a share subscription agreement with CRRC UT to invest in Ireka and subsequently establish a joint venture relationship between both parties, of which Ireka will hold 51% and CRRC UT – 49%. This agreement entails the subscription by CRRC UT of 15.83 million shares, representing about 9.27% of the total number of issued shares in Ireka, for a total price of RM9.18 million (1.9 million euros). Upon completion of the share subscription exercise, CRRC UT will emerge as a substantial shareholder holding 8.48% equity interest in Ireka based on the enlarged share capital.
The CRRC Group already has a presence in Malaysia and is an active player in the country’s rail industry through its supply of contracts for the LRT System, Express Rail Link and KTM Komuter. Meanwhile, Ireka has a 50-year track record in building a number of major national infrastructure projects. “There is no doubt that CRRC’s technical know-how and our wide business network accumulated over the last 50 years will complement each other well,” Ireka’s group managing director, Datuk Lai Voon Hon, said.
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