1. INTRODUCTION

The Board of Directors of Nestcon (“the Board”) wishes to announce that Nestcon Builders Sdn. Bhd. (“Nestcon Builders”), a wholly-owned subsidiary of the Company, had on 10 January 2023 accepted the letter of award dated 10 January 2023 (“LOA”) awarded by Armada Istimewa Sdn. Bhd. (“Armada Istimewa”) for undertaking the construction and completion of earthworks, piling and pile caps, retaining wall, substructure, main building works and infrastructure works for the development project undertaken by Armada Istimewa in respect of the construction of 47-storey mixed commercial development comprising 320 units of serviced apartment and 354 units of strata office with facilities, podium car park, shops and restaurants/bars to be erected on the lands held under Lots 53, 55 and 56, Section 43, Jalan Liew Weng Chee, Bandar Kuala Lumpur, Wilayah Persekutuan Kuala Lumpur (“the Contract Works”).


2. INFORMATION ON NESTCON BUILDERS

Nestcon Builders was incorporated in Malaysia as a private company limited by shares having its registered address at No. 7-1, Jalan 109F, Plaza Danau 2, Taman Danau Desa, 58100 Kuala Lumpur, Wilayah Persekutuan Kuala Lumpur, and it is a wholly-owned subsidiary of the Company.

The nature of business of Nestcon Builders is principally involved in construction works.


3. INFORMATION ON ARMADA ISTIMEWA

Armada Istimewa was incorporated in Malaysia as a private company limited by shares and having its business address at No. 18, Block 2, Jalil Link, Jalan Jalil Jaya 2, Bukit Jalil, 57000 Kuala Lumpur, Wilayah Persekutuan Kuala Lumpur.

The nature of business of Armada Istimewa is principally involved in real estate activities with own or leased property n.e.c..


4. DETAILS OF THE LOA

(a) The contract sum for the Contract Works is RM200,000,000.00 (Ringgit Malaysia Two Hundred Million Only) (“the Contract Sum”).

(b) The overall completion for the Contract Works is within Forty-One (41) months including the mobilization period, all festival and public holidays and is expected to be completed on or before 16 June 2026.

(c) The defect liability period of the Contract Works shall be Twenty-Seven (27) months from the date of the Certificate of Practical Completion of the Contract Works.

(d) Nestcon Builders shall carry the Contract Works in accordance with the other supplementary terms and conditions set out in the LOA.


5. FINANCIAL EFFECTS 

The acceptance of the LOA by Nestcon Builders to undertake the Contract Works is expected to contribute positively to the net assets per share, earnings per share and gearing of the Company throughout the duration of the Contract Works.


6. RISK FACTORS

The Company does not foresee any exceptional risk other than the normal operational risks associated with the LOA and/or the Contract Works. Nevertheless, the Company will take the necessary steps to mitigate the risks as and when they occur.


7. APPROVAL REQUIRED

The acceptance of the LOA is not subject to the approval from the Company’s shareholders’ and/or any regulatory authorities.


8. DIRECTORS’ AND MAJOR SHAREHOLDERS’ AND/OR PERSONS CONNECTED WITH A DIRECTOR OR MAJOR SHAREHOLDER’S INTERESTS 

None of the Directors and/or major shareholders of Nestcon or persons connected with them has any interests, direct or indirect, in the LOA and/or the Contract Works.


9. STATEMENT BY THE BOARD OF DIRECTORS

The Board, after having considered all aspects of the LOA and the Contract Works, is of the opinion that the LOA and the Contract Works are within the ordinary course of business of Nestcon and the acceptance of the LOA is in the best interest of the Company.


This announcement is dated 10 January 2023.