Thursday 28 Mar 2024
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KUALA LUMPUR (Jan 6): Zelan Construction Sdn Bhd (ZCSB), a wholly-owned subsidiary of Zelan Bhd, today entered into a joint venture (JV) agreement with ICOP Construction (M) Sdn Bhd and Zelan Consolidated (Overseas) Sdn Bhd to undertake RM96.99 million worth of subcontract works for the construction of a centralised sewage treatment system in Sungai Langat.

In a filing with Bursa Malaysia, Zelan said the special purpose JV company will be named Zelan ICOP Consortium Sdn Bhd and will carry out the subcontract works at the Langat River Basin catchment area.

It will undertake the subcontract works, which involve the construction and completion of approximately 16.6km of pipe jacking in various sizes and 164 number of shafts for jacking and receiving pits in various sizes and depths, the filing stated.

ZCSB, as the lead partner in the joint venture, will have an 80% stake in the JV company, while ICOP will have 20% participating interest, the filing read.

"ZCSB's scope of works involves the construction of shafts or manholes, including the installation of pre-cast manholes for both pipe jacking pits and receiving pits," the filing stated.

"ICOP's scope of works involves the installation of pipe jacking or microtunnelling, including (the) installation of jacking pre-cast pipe culvert, vitrified clay pipes and grouting," it added.

Zelan said it had initially received the letter of award for the subcontract works from MMC-Sumitomo Consortium on Oct 20, 2015 but was later notified by MMC Pembetungan Langat Sdn Bhd that it had taken over the project from the consortium.

The contract is expected to be completed within 26 months from the date of possession of the site to be notified by contractor MMC Pembetungan Langat.

Zelan said the JV and the project is expected to contribute positively to the consolidated earnings and improve the net assets of the group for the financial year ending Dec 31, 2016 and the subsequent financial years over the duration of the contract.

The JV agreement is conditional upon the fulfilment of certain conditions within a fortnight from the date of the agreement, including the approval of directors and shareholders of ZCSB and ICOP for the JV.

Zelan shares closed 1 sen or 4.17% higher at 25 sen, with a market capitalisation of RM211.22 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.)

 

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