KUALA LUMPUR: Digistar Corp Bhd will consider a dividend payout after receiving a lump sum payment from the works ministry by July next year. The payment is in relation to the construction of the Malaysian National Technology Advancement Centre (NTAC) in Alor Gajah, Melaka.

At a media briefing yesterday, the group’s chief executive officer Datuk Wira Lee Wah Chong said Digistar completed the construction in June, two months before the scheduled three-year completion period.

“According to the contract we entered, we will be receiving a bullet repayment of RM66 million after finishing the contract, and can only pay dividend one year after the completion, which would be July next year,” he said.

“Most of the people I’ve met don’t understand [the situation]. Only 10% of them know the situation, the other 90% of them reacted negatively to our results. But after we explain to them, they will get it,” he said.

Should the dividend materialise, it would be the first payout by Digistar since 2010.

Digistar secured the RM240 million NTAC project in September 2013, with an 18-year concession agreement, inclusive of the three-year construction period. The concession is to manage and maintain the buildings.

Under the agreement, the group has to bear the construction cost and the government will reimburse Digistar RM3 million every month after the NTAC is operational.

To fork out the construction cost, Digistar undertook a bond issuance exercise to raise some RM280 million at an average coupon rate of 4.5%, and RM11 million of subordinate bonds with an average coupon rate of 15%.

“The coupon rate for the subordinate bond was higher because there is a bank guarantee on it. If the project failed, this money is gone. If it succeeds like what had happened, the bank gets a higher return,” Lee said.

While the NTAC project would give Digistar a recurring income for  the next 15 years, Lee said the group is still growing its other business activities, most notably the central monitoring station (CMS) service.

“With our six command centres in Penang, Kuala Lumpur, Melaka, Johor, Sarawak and Sabah, we have a capacity to handle 100,000 subscribers for the service. Currently, we have 6,000 subscribers,” he said.

CMS is Digistar’s security monitoring system, which features immediate crime response and intrusion report services.

Lee said the group’s CMS service is the only one that will be answered by the Royal Malaysia Police (RMP).

“Because there were too many false alarms from other CMS service providers, the RMP sent out notices to all our competitors except us, to say that the police will not entertain reports sent out from their systems,” he said.

“We also have our own response team, Polis Bantuan, to attend to intrusion into our client’s premises. This is not the kind of service you would get by simply employing a foreigner to guard your community,” he said.

In 2017, Digistar will try to increase the awareness of its product, aiming to increase its CMS clientele to 10,000 subscribers and double the number in 2018.

Digistar’s share price closed half sen or 2.94% lower at 16.5 sen yesterday, valuing the group at RM82.98 million.