SINGAPORE (Mar 28): Libra Group has completed the $12 million acquisition of a 51%-stake in a Malaysia-based tourism and retail-related business as part of its new asset-light growth diversification strategy.

See: Libra revises consideration and terms in 51% stake acquisition of Malaysian travel agency

Libra, a Singapore-based integrated building solutions provider, acquired YC Capital Consolidated from Chu Sau Ben, the company’s executive chairman and CEO, in an all-share transaction.

See: Libra Group to acquire BCA C1-graded builder for about $1 million

Apart from offering travel and tour agency services in Malaysia, YC Capital also retails luxury items, local herbal products, local delicacies such as bird’s nest, coffee, chocolates and mattresses.

These products are sold through four YC Capital subsidiaries located in the Klang Valley. Currently, most of the patrons are tourists from China, as well as Taiwan and Indonesia.

Libra will recognise nine months of revenue and profit from YC Capital for FY2018. In FY2017, Libra posted a net profit of $1.6 million on the back of $70.5 million revenue.

Chu says: “While FY2017 marks our fifth consecutive year of profitability, the current business is facing margin pressure due to rising labour and operating costs. We believe YC Capital will be a proxy to Malaysia’s tourism play and marks the start of a transformational catalyst for Libra. Apart from charting a growth strategy in a higher-margin business, YC Capital has the potential to enhance shareholder value.”

“We intend to build on the track record and network of YC Capital to increase the product portfolio and expand to other services,” he adds.

The consideration of $12 million was satisfied through the issue and allotment of 93.75 million new shares at 12.8 cents each to Chu Sau Ben, giving him a 72.0% stake in the enlarged share capital of Libra, which has increased from 119.54 million shares to 213.29 million shares.

Shareholders of Libra had unanimously approved the acquisition at an Extraordinary General Meeting on Feb 5.

Shares in Libra Group closed at 15 cents on Wednesday.