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Tuesday, March 4, 2008

Ireka acquires small stake in Viet developer

IREKA Corp Bhd, a construction firm, has bought a small stake in Vietnam's second biggest listed company for RM16 million, in a deal that has excited investors.

Its stock, which resumed trading in the afternoon after a morning suspension, was the second top gainer yesterday, rising 25 per cent to close at RM1.27.

Kenanga Investment Bank head of research Yeonzon Yeow viewed the acquisition as a strategic move that would help Ireka win more construction jobs in Vietnam.

"It is true that the share acquired by Ireka is small but having a stake in an established company like KBC (KinhBac City Development Shareholding Corp) would certainly act as a safety net for Ireka in their Vietnam venture.

"Most probably Ireka would be sub-contractor for KBC. This would help prepare the company for business climate in Vietnam," he told Business Times.

Ireka is buying 722,000 shares or 0.7 per cent of KBC.

KBC, Vietnam's second biggest company by market value, is involved in the development, construction and operations of industrial and urban zones, and related infrastructure works in Vietnam.

At present, it owns and operates three industrial and urban zones - Que Vo Industrial Park, Quang Chau Industrial Park and Phuc Nich Urban Area - covering a total land area of over 1,100 hectares.

By New Straits Times

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