Kuching, July 6: Sarawak Consolidated Industries Berhad (“SCIB”), a prominent player in the construction industry, announced today that its wholly-owned subsidiary, SCIB Properties Sdn. Bhd. (“SCIBP”), has reached a Settlement Agreement with Awana JV Suria Saga Sdn. Bhd. (“AJVS”) to mutually terminate their Engineering, Procurement, Construction, and Commissioning (“EPCC”) contract for housing development works in Mukim Hulu Bernam Timur, Daerah Muallim, Perak.
SCIBP, which accepted the letter of award for the EPCC project in 2021, has taken necessary measures to safeguard its interests and mitigate risks associated with the project’s stagnation.
As of the announcement date, the final claims mentioned in the Settlement Agreement remain unaffected. The outstanding balances will undergo an impairment review in the next reporting quarter. In the event that the outstanding balances are fully impaired, the group’s gearing will increase, and there will be a reduction in earnings per share and net assets of SCIB for the financial year ending June 30, 2023. However, any impairment loss will be reversed once the debts are subsequently recovered. The Settlement Agreement will have no impact on the company’s issued share capital or the holdings of substantial shareholders.
Leading up to and following the appointment, SCIBP advanced various sums to AJVS amounting to RM18,715,249.52. This termination agreement also includes confirmation of the obligation for the full and final settlement of debts, along with the establishment of terms and a payment schedule for the amount owed by AJVS.
“This termination is in the best interests of the Company as we are concerned about the lack of progress since the contract’s inception. According to the contract terms, SCIBP will not incur penalties or liquidated damages. We would also like to assure our shareholders that this will not impact the Company’s issued share capital or the holdings of substantial shareholders,” stated Ku Chong Hong, the Managing Director of SCIB.
As of today, SCIB’s order book stands at a cumulative contract value of RM365.99 million.
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