Mah Sing secures RM500m vendor financing from Stone Master

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This article first appeared in The Edge Financial Daily, on November 18, 2015.

 

KUALA LUMPUR: Mah Sing Group Bhd’s wholly-owned unit Mah Sing Trading Sdn Bhd has signed a framework agreement (FA) with Stone Master Corp Bhd yesterday for interest-free vendor financing services of up to RM500 million.

In a press statement yesterday, the property group said the FA is valid for 18 months and will see Stone Master extending Mah Sing a credit limit of up to RM500 million for its products and services, which include natural stones, ceramic tiles, sanitary wares and other building finishing materials. “Any part of the RM500 million vendor financing utilised within these 18 months will be interest-free and payable over five years in 60 equal instalments, which shall commence within 30 days upon physical completion and handing over of the work,” it said.

Under the FA, Mah Sing can engage Stone Master as its direct contractor or nominated subcontractor for suitable development projects, which are to be identified by Mah Sing and mutually agreed upon by Stone Master.

Mah Sing chief executive officer Ng Chai Yong said the FA allows the group to have better flexibility for the selection of materials with a favourable deferred payment term of 60 months — with no interests — which is in line with its prudent operating cash flow plan.

Stone Master managing director M T Koh said the FA’s credit limit is the largest extended to any developer in Malaysia so far.

Mah Sing closed unchanged at RM1.37 yesterday, with a market capitalisation of RM3.3 billion. Stone Master inched up 0.5 sen or 1.69% higher to close at 30 sen, which values it at RM27 million.