OTHERS SKH CONSORTIUM BERHAD ("SKH" OR "THE COMPANY") Updates in relation to the Managing Contractor Agreement entered into between Super Kian Holdings Sdn Bhd, a wholly-owned subsidiary of the Company, and Total Merit Sdn Bhd
|SKH CONSORTIUM BERHAD|
SKH CONSORTIUM BERHAD ("SKH" OR "THE COMPANY") Updates in relation to the Managing Contractor Agreement entered into between Super Kian Holdings Sdn Bhd, a wholly-owned subsidiary of the Company, and Total Merit Sdn Bhd
Reference is made to the earlier announcements on 7 September 2015, 10 September 2015, 11 May 2017 and 12 May 2017 (“the Announcements”).
Super Kian Holdings Sdn Bhd (“SKHSB”), a wholly-owned subsidiary of SKH, had on 7 September 2015 entered into a Managing Contractor Agreement (“MCA”) with Total Merit Sdn Bhd (“TMSB”), whereby SKHSB has been appointed as the managing contractor for the development of a piece of land of approximately 12.1407 hectare held under HS(D) 3832, PT4141, Mukim Banggul in Kemaman, Terengganu owned by Lembaga Pemegang Amanah Yayasan Pembangunan Keluarga Terengganu.
Further to the Announcements, the Board of Directors of SKH (“the Board”) wishes to announce that SKHSB had on 4 May 2018 entered into a Deed of Mutual Termination with TMSB and both parties have mutually agreed to terminate the MCA (“the Deed of Mutual Termination”).
2. SALIENT TERMS OF THE DEED OF MUTUAL TERMINATION
The salient terms of the Deed of Mutual Termination are as follows:-
(i) TMSB shall release SKHSB from the due performance and observance of all its obligations and covenants under the MCA and SKHSB likewise releases TMSB from the due performance and observance of its obligations and covenants under the MCA;
(ii) TMSB shall refund the performance bond of RM12 million to SKHSB within 90 days from the Deed of Mutual Termination or such other date as may be agreed between the parties; and
(iii) TMSB shall fully indemnify SKHSB and keep SKHSB indemnified against any monies which have been paid by SKHSB and any costs incurred pursuant to the MCA.
3. RATIONALE OF THE TERMINATION
TMSB foresees that there will be a further delay in the development of the land due to the current economic condition which implies that the re-commencement of the managing contractor work by SKHSB will be further extended. The Board understands that the potential benefits expected to be derived from the MCA could not be materialised during the original intended timeframe and foresees that it could be prolonged to a longer time period. The Board is of the view that the termination will mitigate the business and financial risks potentially exposed to the Company and its subsidiaries (“SKH Group” or “the Group”).
In addition, the performance bond that could be recovered would be allocated to the Group’s existing business.
4. FINANCIAL Effects of the DEED OF MUTUAL TERMINATION
4.1 Share capital and substantial shareholders’ shareholding
The Deed of Mutual Termination has no effect on the issued and paid-up share capital and substantial shareholders’ shareholding of SKH.
4.2 Earnings and net assets (“NA”)
Following the Deed of Mutual Termination, the potential benefits expected to be derived from the MCA shall not be materialised and thus unable to improve the earnings and NA of the Group for the financial year ending 31 March 2019 onwards over the management period underlying the MCA.
The Deed of Mutual Termination has no effect on the gearing of SKH Group for the financial year ending 31 March 2019.
5. Directors’ and substantial Shareholder’s Interests
None of the directors and/or substantial shareholders of SKH and/or persons connected with them have any interest, direct or indirect, in the Deed of Mutual Termination.
6. STATEMENT BY DIRECTORS
The Board, after considering all aspects of the Deed of Mutual Termination, is of the opinion that the Deed of Mutual Termination is in the best interest of the Group.
7. Document for Inspection
The Deed of Mutual Termination is available for inspection at the registered office of SKH at No. 9A, Jalan Medan Tuanku, Medan Tuanku, 50300 Kuala Lumpur between 9.00 am to 5.00 pm from Monday to Friday (except for public holidays) for a period of one (1) month from the date of this announcement.
This announcement is dated 4 May 2018
|Company Name||SKH CONSORTIUM BERHAD|
|Date Announced||04 May 2018|
|Category||General Announcement for PLC|