(AFP) Government investment vehicle Danasaham said today it will take control of construction giant United Engineers Malaysia (UEM) following the success of its one-billion-dollar takeover bid.

"Danasaham's immediate task is to take control of the board and management of the UEM Group," the government body said in a statement.

Danasaham said it would soon be making an announcement on the appointment of board members, a chief executive and key management personnel.

It said the new board would work closely with the chief executive to "spearhead and drive the financial and operational restructuring of the UEM group".

"The success of its voluntary offer augers well for the stock market in terms of investor confidence and will have positive effects on the economy," it said.

Political clout

It added it has received an acceptances exceeding the 90 percent minimum stipulated in its offer.

The government announced a bid to take over UEM in July as the first step towards tackling its biggest corporate headache - UEM associate company Renong - and wooing foreign investors back to the stock market.

Renong, which once enjoyed political clout as the investment arm for Prime Minister Mahathir Mohamad's ruling National Front party, has some RM13 billion in outstanding group debt.

UEM has a 32.6 percent stake in Renong, which in turn has a 37.9 percent stake in UEM.

After the successful takeover by Danasaham, a unit of government investment arm Khazanah Nasional Bhd., UEM will be delisted from the stock exchange.

The Renong group, which has interests in banks, toll roads, oil and gasfields and real estate, is expected to undergo a restructuring with a new UEM management in place, analysts said.