General Announcement

03/11/2003

Joint Venture between KNM Process Systems Sdn Bhd and C Engineering & Integrated Services (CEIS) Pty Ltd

KNM GROUP BERHAD

Type

Announcement
SubjectJoint Venture between KNM Process Systems Sdn Bhd and C Engineering & Integrated Services (CEIS) Pty Ltd

Contents :

1. Introduction


    The Board of Directors of KNM Group Berhad (KNM) is pleased to announce that KNM Process Systems Sdn Bhd (KNMPS), a wholly-owned subsidiary of KNM, had on 31 October 2003 entered into an exclusive Joint Venture Agreement (JVA) with C Engineering & Integrated (CEIS) LTD (CEIS), a wholly-owned subsidiary of Clough Engineering Ltd of Australia, to form an unincorporated joint venture alliance to provide integrated maintenance and turnaround management services to the oil, gas and petrochemical industry in Malaysia and Brunei.
2. Salient terms of the JVA

    The purpose of the JVA is to formalise and set out the terms of the relationship of the parties in respect of their investment, business participation and scope of work in the JV collaboration.

    The parties interest in the JVA will be KNMPS, 70% and CEIS, 30%.
3. Rationale for the JVA

    This JVA is a significant milestone for KNMPS to establish itself with a renowned international company for a new business stream in integrated maintenance services for the oil, gas and petrochemical industry.
4. Information on KNMPS

    KNMPS is a Malaysian process equipment manufacturer and storage facilities provider with the capability to undertake the designing, manufacturing, fabricating, construction, assembly, commission and maintenance of process equipment, mounded bullets, pressure vessels, heat exchangers, skid mounded assemblies, process piping systems, storage tanks, specialised structural assemblies and module assemblies for the oil, gas and petrochemical industries. Its major products include process vessels, storage facilities, LPG mounded bullets, heat exchangers and air coolers, and specialised steel structural systems. As an after sales service, KNMPS provides its customers with maintenance services.
5. Information on CEIS

    CEIS is a subsidiary of Clough Engineering Limited, a company listed on the Australian Stock Exchange and one of Australia's largest diversified engineering construction companies with turnkey capabilities, ranging from complex front-end engineering design, long-term operations and maintenance services for oil, gas, petrochemical and industrial plants worldwide. The Clough Group has an operational base which stretches from the North Sea to Asia and America.

    The Clough group is built from an international multi-disciplined engineering, construction and support services and has a long history of joint venture arrangements, which have many of the features of contractual partnerships and alliances.
6. Approvals

    The JVA is not subject to the approval of the shareholders of KNMPS or CEIS, or the approval of any regulatory authority in Malaysia.
7. Directors' and major shareholders' interest

    None of the directors or substantial shareholders of KNM has any direct or indirect interest in the JVA.
8. Directors' opinion

    The Board of Directors of KNM is of the opinion that the JVA is in the best interest of KNMPS as CEIS has strong expertise on management, planning, technical, know-how on matters related to integrated maintenance, shutdown and turnaround management which will in turn complement areas of KNMs expertise.

    The Clough Groups experience is an assurance that the CEIS relationship with KNMPS will be focused on the long-term and be managed to the benefit of both parties.
9. Effects of the JVA

    The JVA will have no material impact on KNMs earnings and net tangible assets for the financial year ending 31 December 2003. However, it is expected to contribute positively to KNMs future earnings and enhance KNMs revenue in the rapidly-growing integrated maintenance services sector of the oil, gas and petrochemical industry.

    KNM has submitted a tender to Petronas Carigali Sdn Bhd for the hook-up and commissioning of Petronas facilities for 2004 to 2007 and has been invited to pre-qualify for the main package for the ABF Tenth Turnaround, which if successful, will be undertaken under the JVA.
10. Document for Inspection

    A copy of the JVA is available for inspection at the registered office of KNM at 15, Jalan Dagang SB 4/1, Taman Sungai Besi Indah, 43300 Seri Kembangan, Selangor Darul Ehsan during normal office hours from Mondays to Fridays, except public holidays, for 3 months from the date of this announcement.

    This announcement is dated 3 November 2003.

Announcement Info

Company NameKNM GROUP BERHAD  
Stock Name KNM
Date Announced3 Nov 2003  
CategoryGeneral Announcement
Reference NoKG-031103-62450

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