Leweko proposes diversification into construction

Leweko proposes diversification into construction
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KUALA LUMPUR (Oct 11): Leweko Resources Bhd, which was taken over by Rengit Capital Sdn Bhd, has proposed today to diversify its core business to include construction and construction-related activities.

The company said in an exchange filing today that the proposals are in line with plans of its new major shareholders — Rengit Capital, Kor Beng, and Kwan Yet Ming — to grow the construction business of Leweko whilst complementing its existing business activities.

Leweko is seeking shareholders’ approval for new recurrent-related party transactions to be entered into.

“Upon completion of the proposals, the major shareholders intend to award construction contracts to Leweko group through companies controlled by them, and bid for new contracts from third parties by leveraging on the business network and track record of the major shareholders in the construction and property business,” the filing read.

The management expects the construction business to contribute at least 25% to net profits of the current loss-making Leweko.

This is as the group is expecting to be awarded construction jobs of up to RM100 million by the construction arm owned by its major shareholders.

It is also the management’s plan to bid for construction contracts from third parties by leveraging on the business network and track record of the major shareholders.

Barring any unforeseen circumstances, the board expects the proposals to be completed by end-2019.

Shares of Leweko closed unchanged today at 18 sen, bringing a market capitalisation of RM57.94 million.