1. INTRODUCTION

The Board of Directors of Nestcon (“the Board”) wishes to announce that Nestcon Infra Sdn. Bhd. (“NISB”), a wholly-owned subsidiary of the Company, had on 18 January 2023 accepted the Letter of Acceptance of Tender dated 18 January 2023 (“LOAT”) from Senai Airport City Sdn. Bhd. (“SACSB”) for the appointment of NISB as a contractor to undertake the Phase 2 construction and completion of remaining earthworks (“Contract Works”) for Proposed Development of Senai Airport City on Lot PTD 175349 – PTD 175352, Mukim Tebrau, Daerah Johor Bahru, Johor Darul Takzim (“Project”).


2. INFORMATION OF NISB

NISB 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.

The nature of business of NISB is principally involved in construction works.


3. INFORMATION OF SACSB

SACSB was incorporated in Malaysia as a private company limited by shares having its registered address at Ground Floor, Wisma Budiman, Persiaran Raja Chulan, 50200 Kuala Lumpur, Wilayah Persekutuan Kuala Lumpur.

The nature of business of SACSB is the property owner and developer.


4. DETAILS OF THE APPOINTMENT AND LOAT

(a) NISB shall undertake and complete the Contract Works in accordance with the terms and conditions set out in the LOAT.

(b) The provisional contract sum for the Project is RM27,264,920.90 (Ringgit Malaysia: Twenty-Seven Million Two Hundred Sixty-Four Thousand Nine Hundred Twenty and Cent Ninety Only) and the final contract sum shall be subject to the confirmation on actual approved Contract Works to be done and based on unit rates which are fixed for the entire contract period.

(c) The LOAT shall be in force for a contract period of fifteen (15) months with effect from the date of site possession, 1 February 2023 to the completion date of 30 April 2024.

(d) The Performance Bond shall remain valid and effective until three (3) months after the issuance of the Certificate of Practical Completion (“CPC”).

(e) The defect liability period of the Works shall be eighteen (18) months from the date of the CPC of the Contract Works certified by Superintending Officer / Client.


5. FINANCIAL EFFECTS 

The acceptance of the LOAT by NISB to undertake the Project 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 LOAT and/or the Projects. Nevertheless, the Company will take the necessary steps to mitigate the risks as and when they occur.


7. APPROVAL REQUIRED

The acceptance of the LOAT 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 LOAT and/or the Project.  


9. STATEMENT BY THE BOARD OF DIRECTORS

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


This announcement is dated 18 January 2023.