Gamuda Bhd’s wholly owned indirect subsidiary, Gamuda DC Infrastructure Sdn Bhd entered into a sale and purchase agreement (SPA) with West Synergy Sdn Bhd for RM424.4 million to be developed into cloud and data centre infrastructure.
“The acquisition shall be funded by internally generated funds. Barring unforeseen circumstances, it is expected to be completed by the end of July 2025,” the company added.
West Synergy is a 60%-owned indirect subsidiary of MUI Properties Bhd.
Meanwhile, MUI Properties said that the disposal is expected to result in a one-off estimated net gain of RM206.13 million and increase its net assets by RM123.68 million.
The proposed disposal is part of the group’s efforts to monetise its land banks and investment properties to strengthen its financial position and achieve strategic goals.
“Part of the proceeds will be used to acquire new land banks or properties for development or investment in prime location to be identified later. These acquisitions will help the group to diversify its portfolio, explore new opportunities and sustain long-term growth,” it added.
However, Hong Leong Investment Bank’s (HLIB) believes that the SPA will have little impact on Gamuda’s balance sheet due to a projected rise in retained earnings.
At the same time, the investment bank’s preliminary estimates show that the land Gamuda Bhd acquired at Springhill Industrial Park in Negeri Sembilan could support the development of data center (DC) capacities of between 700-1,00 megawatts (MWs) based on two to three MWs per acre with a downward adjustment in net area.
This is assuming conservative construction costs of RM20 million per MW, potential long-term DC contracts could amount to RM14 billion-RM20 billion.
“We believe there is room to tweak our numbers depending on water and power infrastructure plans. On the whole, we expect the development to take place over multiple phases given the potential scale,” HLIB noted.
On another note, RHB Investment Bank (RHB IB) estimated that Gamuda has the potential of achieving a potential DC capacity of 730MW, assuming 70% of the land would be earmarked for DC development, giving a job valuation of RM15 billion.
“This is based on the DC benchmark that Gamuda is building in Elmina Business Park, which is roughly RM21 million per MW and 2.7MWs per acre (as per our calculations),” RHB IB said.
It expects an international multinational company (MNC) to purchase the land but it is unclear as to the kind of structure Gamuda will be building.
Furthermore, RHB IB said that Gamuda’s balance sheet should comfortably fund the acquisition, as net gearing may reach 43% from 39% at end-October 2024.
