Pestech to build power supply infra for Benalec's Tanjung Piai industrial park

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KUALA LUMPUR (April 14): Benalec Holdings Bhd will engage Pestech International Bhd (Pestech) 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 today, Benalec said its indirect wholly-owned subsidiary Tanjung Piai Maritime Industries Sdn Bhd (Tanjung Piai Maritime) has, on Monday, entered into a memorandum of understanding (MoU) with Pestech Sdn Bhd (PSB), a wholly-owned unit of Pestech (fundamental: 0.9; valuation: 0.7), 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” to the Tanjung Piai industrial park.

Under the MoU, Tanjung Piai Maritime intends to work with PSB “on an exclusive basis”, to explore various avenues in the establishment of power supply infrastructure to the new development at 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 at 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 to apply, design, for the electrical infrastructures to 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 (project contract),” the filing further noted.

Tanjung Piai Maritime wants to develop the Tanjung Piai industrial park into a large integrated petroleum, petrochemical and maritime industries and other oil and gas-related industries industrial park that covers some 3,485 acres (1,410.33ha).

Benalec said the MoU will have no material effect on earnings, revenue and net assets per share of the group for the financial year ending June 30, 2015, but that it is expected to contribute positively to the future earnings of the group, should the project contract materialise.

Benalec closed at 81 sen yesterday, up 1.5 sen or 1.89%, which gives it a market capitalisation of RM647.30 million. Pestech closed at RM5, down 9 sen or 1.77%, for a market capitalisation of RM871.88 million.

(Note: The Edge Research's fundamental score reflects a company’s profitability and balance sheet strength, calculated based on historical numbers. The valuation score determines if a stock is attractively valued or not, also based on historical numbers. A score of 3 suggests strong fundamentals and attractive valuations.)