The Board of Directors of PESTECH wishes to announce that PESTECH Sdn. Bhd. ("PSB"), a wholly-owned subsidiary of the Company had on 5 November 2012 entered into a MOU with UPL to explore the establishment of power supply infrastructure to the Dongphosy Specific Economic Zone ("DSEZ") in Lao People's Democratic Republic ("Lao PDR").
Information on UPL
UPL is a company duly incorporated under the laws of Lao PDR with place of business at Unit F11-F16 Asean Mall, Khampheng Meuang Road, Ban Phonthan Vientiane, Lao PDR. UPL had in January 2012 won the mandate to jointly develop the DSEZ with the Lao PDR government under the provisions of Prime Minister Decree 443.
Information on DSEZ
The DSEZ is a Specific Economic Zone identified by the government of Lao PDR on its national socio-economic development agenda, to promote foreign direct and local investments in target areas through a one-stop service modality. Sitting strategically at a mere 50 meters across from the Dongphosy Immigration/ Customs checkpoint and 19 kilometers away from Vientiane capital city, the DSEZ is a mixed development with education and medical institutions, industrial and bonded warehousing facilities and commercial lots comprising shopping malls, financial centre and integrated resort. Covering an area of 53.9 hectares, DSEZ has a 50 year lease with an option to extend for an additional 40 years.
Salient tems of the MOU
UPL desires to develop the DSEZ into a mixed development real estate property. As part of the development plan, UPL needs to ensure that power supply is being delivered to the tenants at DSEZ.
Electricite du Laos ("EDL") is the power supply authority in Lao PDR which owns and operates Lao PDR's main generation, transmission and distribution assets in Lao PDR, and manages electricity imports into its grids and exports from its stations. Thus, EDL will play a critical role in the implementation of the entire power supply aspect of the DSEZ.
UPL intends to work together with EDL and PSB to explore various avenues to deliver the power supply to the new development at DSEZ. UPL and PSB ("the Parties") shall initiate discussions and feasibility studies with the assistance of each other for a period of six (6) months from the date of the MOU or such further period(s) as may be mutually agreed upon by the Parties for the establishment of power supply infrastructure to the DSEZ ("the Proposal").
As such, the Parties have agreed to enter into a MOU to set out their intentions and mutual understanding in connection to the Proposal and will jointly explore with EDL on the final set up of the power supply infrastructure to the DSEZ.
The MOU will have no material effect on the earnings, revenue and net assets per share of the Group for the financial year ending 31 December 2012 but is expected to contribute positively to the future earnings of the Company.
The Company does not foresee any exceptional risk other than the normal operational risk associated with the MOU. The Company will take the necessary steps to mitigate the risks as and when it occurs.
None of the Directors and/or Major Shareholders and/or persons connected to them, has any interest, direct or indirect in the MOU.
The Board of Directors of PESTECH is of the opinion that the MOU is in the best interest of the Company.
This announcement is dated 6 November 2012.