Prinsiptek inks RM2.13 billion JV in East Malaysia

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KUALA LUMPUR (Jan 15): Prinsiptek Corp Bhd is developing an oil palm plantation plus a palm oil mill and other facilities in a RM2.13 billion joint venture.

In an announcement today, Prinsiptek Corp said it is teaming up with AA Strategic Marketing Sdn Bhd and TTSJ Trading Sdn Bhd for the joint venture.

The partnership will see the companies pool their expertise to develop an oil palm plantation and palm oil mill at Lawas, Sarawak; and build a port, jetty, bulking tank for palm oil, refinery and green energy plant at Sipitang Port, Sabah.

“The joint venture would strengthen Prinsiptek’s core competencies in the construction industry as well as an income stream to PCB’s Group business in the long run,” the company said in a filing with Bursa Malaysia.

It further said that AA Strategic will plan, organise delegate and control every phase of development, including obtaining the relevant approvals from authorities.

Meantime, TTSJ Trading will be responsible for applying to the State government for approval to construct the Sipitang Port facilities.

TTSJ will also be responsible for issuing a “Standby Letter of Credit being collateral towards the Bank facilities granted”.

Prinsiptek, via its wholly-owned subsidiary Tanah Perangsang Sdn Bhd, will undertake the construction works for a consideration of RM2.13 billion.

Prinsiptek said the proposed development and construction shall be completed within five years from the date of all necessary approval of the relevant authorities is obtained.

“The financial commitment of the joint venture shall be funded from internally-generated funds and bank borrowings,” it added.

Shares of Prinsiptek fell 0.5 sen or 4.35% to settle at 11 sen, giving it a market capitalisation of RM38.35 million. The counter saw 1 million shares traded.