SARAWAK Consolidated Industries Bhd (SCIB), a key player in the construction industry, today announced that its wholly-owned subsidiary SCIB Properties Sdn Bhd (SCIBP) has signed a Settlement Agreement with Awana JV Suria Saga Sdn Bhd (AJVS) to mutually end their engineering, procurement, construction and commissioning (EPCC) contract involving housing development works for Mukim Hulu Bernam Timur, Daerah Muallim in Perak.
“This termination is in the best interests of the company as we are concerned on the lack of progress since the inception of the contract. As per the contract, there will be no penalties or liquidated ascertained damages for SCIBP.
“We would also like to assure our shareholders that this will not affect the company’s issued share capital or substantial shareholders’ holdings,” stated SCIB managing director Ku Chong Hong.
SCIBP, which accepted the letter of award for the EPCC project in 2021, has decided to take the necessary measures to protect its interests by mitigating risks associated with the stagnation of the project’s progress.
Moreover, as of the announcement date, the final claims stated in the Settlement Agreement had not been jeopardised.
The outstanding balances will be subject to impairment review in the next reporting quarter. In any event, should the outstanding balances be fully impaired, the group gearing will be increased and earnings per share as well as net assets of SCIB will be reduced as a result of the impairment loss for the financial year ending June 30, 2023.
Furthermore, any impairment loss will be written back upon subsequent recovery of the debts.
The Settlement Agreement will not have any effect on the issued share capital or the shareholdings of substantial shareholders of the company.
Leading up to and subsequent to the appointment, SCIBP advanced various sums to and/or on behalf of AJVS, totaling RM18,715,249.52. This termination agreement also encompasses the confirmation of obligations for the full and final settlement of debts and the establishment of the term and payment schedule for the amount owed by AJVS.
SCIB’s order book stood at a cumulative contract value of RM365.99 mil as of today. – July 6, 2023