KUALA LUMPUR: MyEG Services Bhd (MyEG) is diversifying its business activities to provide accommodation for foreign workers, starting by renting 512 accommodation units to the Melaka State Development Corp (PKNM).

In a filing with Bursa Malaysia yesterday, MyEG said its 55%-owned subsidiary MY EG Lodging Sdn Bhd (MYEL) had entered into three tenancy agreements with PKNM for the rental of 512 accommodation units to serve as hostels for foreign workers.

“The signing of the tenancy will enable the company to commence operations, and the company will use these sites as pilot sites for future expansion to set up more sites nationwide,” MyEG added.

The principal activity of MYEL is to build, own and operate hostels for foreign workers. The other shareholders of MYEL are Bright Billion Co Ltd (30%), Datuk Tengku Zainuddin Tengku Zahid (10%) and Nor Adnan Zainal Abidin (5%).

The three hostels will be located in Alor Gajah, Kawasan Perindustrian Merlimau and Kawasan Perindustrian Londang with a monthly rental rate of RM80,000, RM40,000 and RM75,000 respectively for three years.

MyEG said the agreements are expected to contribute positively to the group’s earnings for the financial year ending June 30, 2017.

MyEG shares closed one sen or 0.49% higher at RM2.05 yesterday, with a market capitalisation of RM4.93 billion.