Introduction

Pursuant to a Memorandum of Agreement dated 14 April 2008, an unincorporated consortium made of SMHB Sdn Bhd (“SMHB”), an associate of HEB, Ranhill Consulting Sdn Bhd and KTA Tenaga Sdn Bhd (collectively, “the Consortium”), was appointed by Pengurusan Aset Air Berhad (“Client”) as the Consulting Engineer for the Proposed Development of Phase 1 Langat 2 Water Treatment Plant and Water Reticulation System Selangor Darul Ehsan/ Wilayah Persekutuan Kuala Lumpur (“Contract”). The value of the Contract was RM81,955,899.00 (“Contract Sum”).

HEB wishes to announce that on 31 May 2021, the Consortium had accepted a written confirmation from the Client in relation to an additional contract sum of RM29,814,398.03 payable to the Consortium under the Contract (“Additional Contract Sum”).   

The Contract commenced on 4 February 2008 and expected to complete on 31 December 2026 (inclusive of 24 months Defect Liability Period).

SMHB’s scope of services under the Contract include undertaking detailed engineering design, contract management and construction supervision. 

Pursuant to the exclusive teaming arrangement between SMHB and SMHB Engineering Sdn Bhd (“SMHBE”), a wholly-owned subsidiary of HEB, SMHB and SMHBE will be collaborating exclusively to execute and complete the Contract. 

Financial Effects

The Contract is expected to contribute positively to the revenue, earnings and net assets of HEB Group for financial years ending 31 December 2021 to 31 December 2026.  

The Contract will not have any impact on the share capital and/or shareholding structure of HEB.

Directors’ and/or major shareholders’ interests

None of the Directors and/ or Major Shareholders of HEB and persons connected to them has any interest, direct or indirect, in the Contract.

Risk Factors

The risk factors affecting the Contract include, but not limited to execution risks, such as dependency on the progress of the Contract that the role of SMHB is to provide engineering consultancy services. Nonetheless, HEB Group has, throughout the years, established its track record and expertise in undertaking similar contracts. As such, the Board of Directors believes that HEB Group is able to mitigate the aforesaid risk factors.

Directors’ Statement

The Board of Directors, after considering all the relevant factors, is of the opinion that the acceptance of the Contract for the Additional Contract Sum is in the best interest of HEB Group.

This announcement is dated 4 June 2021.