KUALA LUMPUR: Benalec Holdings Bhd will engage Pestech International Bhd to establish the power supply infrastructure for Benalec’s Tanjung Piai Integrated Petroleum and Maritime Industrial Park (Tanjung Piai Industrial Park) in Pontian, Johor.
In a filing yesterday, Benalec said its indirect wholly-owned subsidiary, Tanjung Piai Maritime Industries Sdn Bhd, had entered into a memorandum of understanding (MoU) with Pestech Sdn Bhd (PSB) — a wholly-owned unit of Pestech (fundamental: 0.9; valuation: 0.7) — on Monday to look at avenues in which they can bring about the engagement.
Benalec (fundamental: 0.6; valuation: 1.15) said the MoU is “for exclusive exploratory efforts to build a power supply infrastructure” for the Tanjung Piai Industrial Park.
Under the MoU, Tanjung Piai Maritime intends to work together with PSB “on an exclusive basis” to explore various avenues in the establishment of power supply infrastructure to the new development in the Tanjung Piai Industrial Park.
The two shall initiate discussions and form a definitive contract within six months from the date of the MoU, or in a further period to be mutually agreed upon, for the establishment of the power supply.
“Tanjung Piai Maritime agrees to engage PSB and its nominated consultant [if required] exclusively for electrical infrastructure for Tanjung Piai Industrial Park and subsequently to carry out the design, manufacturing, testing, delivery of equipment and installation, construction and commissioning of the proposal on a full turnkey basis via a project contract based on terms and conditions to be determined later,” the filing noted.
Tanjung Piai Maritime wants to develop the Tanjung Piai Industrial Park into a large integrated industrial park that covers some 3,485 acres (1,410.33ha) for petroleum, petrochemical, maritime and other oil and gas-related industries.
The industrial park is located off Tanjung Piai, Johor, close to Jurong Island, Singapore, and will be built on reclaimed land.
Benalec said the MoU will have no material effect on earnings, revenue and net asset value per share of the group in the financial year ending June 30, 2015, but it is expected to contribute positively to future earnings of the group — if the project contract materialises.
Benalec closed at 81 sen yesterday, up 1.5 sen or 1.89%, giving it a market capitalisation of RM647.3 million. Pestech closed at RM5, down nine sen or 1.77%, with a market cap of RM871.88 million.
This article first appeared in The Edge Financial Daily, on April 15, 2015.