Raffles Infrastructure eyes smart city projects with new major shareholder

Singapore

RAFFLES Infrastructure Holdings - currently on the Singapore Exchange's watch-list - and its new substantial shareholder, South Korea-listed Magic Micro, will explore potential partnerships in infrastructure and smart city projects in the global market.

Both companies signed a memorandum of understanding (MOU) on financial and technological cooperation in infrastructure investment opportunities, according to Raffles Infrastructure's bourse filing on Thursday.

Eric Choo, chief executive officer of Raffles Infrastructure, said: "This is the beginning of our synergistic partnership (with Magic Micro). We are looking to tap Magic Micro's technological expertise and network for future projects."

The collaboration is part of the Singapore-based company's long-term strategy of investing in Asia's infrastructure, Mr Choo added.

Citing a March 2019 report by UBS, Raffles Infrastructure said the global addressable market for smart city projects is set to surge to US$2 trillion in 2025 from US$900 billion in 2016, with Asia to make up 40 per cent of the demand.

Magic Micro took a 20.3 per cent stake in Raffles Infrastructure last month for S$6.9 million, acquiring 13.8 million shares at S$0.50 apiece in an off-market deal.

This makes the South Korean electronics components firm the second-largest shareholder in Raffles Infrastructure, after state-owned enterprise China Capital Investment (Group).

Magic Micro specialises in LED-related materials, serving anchor clients such as Samsung. It has invested in optical semiconductor technology, 5G communications, biosensors, artificial intelligence, big data and cloud data such as blockchain storage.

Separately, early this week, Raffles Infrastructure appointed Ng Pei Eng, 46, as its chief financial officer.

The company was put under SGX's watch-list in June under the "financial entry criteria". SGX noted that the company had recorded pre-tax losses for the three most recently completed consecutive financial years, and an average daily market capitalisation of less than S$40 million over the last six months.

In August, Raffles Infrastructure announced that KPMG had completed its special audit on the firm pertaining to alleged compensation claims made by three customers in 2017. The company is seeking legal advice and will consult with the SGX regulatory arm on the remedial actions. In the same month, KPMG had published an interim independent review report highlighting irregularities at Raffles Infrastructure and potential breaches in listing rules.

The counter last traded at S$0.40 on Wednesday.