The Board of Directors of PESTECH wishes to announce that Tenaga Nasional Berhad had on 7 January 2013, issued a Letter of Acceptance to award a contract for the supply, erect and commissioning of 132KV and 33KV switchgear, 2 x 45MVA 132/33KV power transformer and ancillary equipment, complete with associated civil works for PMU Jerantut ("the Contract") to an unincorporated joint venture between PESTECH Sdn. Bhd. (PSB"), a wholly-owned subsidary of the Company and Mega Linear Sdn. Bhd. ("MLSB") ("the JV").
Information on the JV
The formation of the JV between PSB and MLSB is an unincorporated joint venture instead of an equity share interest entity. This JV is meant to signify a joint effort of both parties involved to undertake the Contract. As such, this JV would not have specific equity shareholding structure for both PSB and MLSB. There will be no requirement of capital investment in the JV which gives rise to paid up share capital and the proportion of the profit sharing between MLSB and PSB has yet to be determined at this juncture.
The percentage ratio pursuant to Paragraph 10.02 (g) of the Main Market Listing Requirements of Bursa Malaysia Securities Berhad will not be applicable on the JV and there will be no necessity to obtain any approval from PESTECH's shareholders and any Government Authorities.
Information on the Contract
The Contract amount is RM15,962,000.00. The commencement date is expected to be sometime before end of January 2013 and the completion date shall be 546 days from the commencement date. The Contract is on a one-off project basis.
The Contract will have no material effect on the revenue and earnings of the Group and net assets per share of the Company for the financial year ending 31 December 2013 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 Contract such as availability and changes in the prices of raw materials. 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 JV as well as the Contract.
The Board of Directors of PESTECH is of the opinion that the JV and the Contract are in the best interest of the Company.
This announcement is dated 8 January 2013.