1. Introduction

Pursuant to a Consultancy Services Agreement dated 12 March 2018 (“Principal Agreement”) between SMHB Sdn Bhd (“SMHB”), as associate of HEB, and the State Government of Kedah (“Client”), SMHB was appointed to provide Detail Design and Consultancy Services for “Projek Menaiktaraf Loji Rawatan Air Pelubang, Kubang Pasu, Kedah Darul Aman” (“Project”).

The original contract value under the Principal Agreement was RM15,985,479.08 (“Original Contract Value”) for the period commencing from 1 December 2016 until 1st January 2022 being the design stage of the Project.

HEB wishes to announce that SMHB had on 12 January 2022 received a signed Supplemental Agreement to the Principal Agreement dated 31 December 2021 (“Supplemental Agreement”) from the Client confirming the extension of SMHB’s appointment for the construction stage and the revised contract value.  

2. Information on the contract pursuant to the Supplemental Agreement (“Contract”)

Estimated Revised Contract Value         :           RM22,679,306.88 (inclusive of Original 

Contract Value)          

Extended Contract Duration                   :           43 months and 27 days

                                                                           (2 January 2022 to 28 August 2025)

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. 

3. 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 2022 to 31 December 2025.  

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

4. Risk Factors

The risk factors affecting the Contract include, but not limited to execution risks, such as dependency on the construction progress of the Project given the role of SMHB pursuant to the Contract as described above. Nonetheless, HEB Group has, throughout the years, established its track record and expertise in undertaking national infrastructure projects. As such, the Board of Directors believes that HEB Group is able to mitigate the aforesaid risk factors.

5. Approval Required

The Contract, being part of the ordinary course of business of HEB Group, is not subject to the approval of shareholders of HEB or any relevant authorities.

6. 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 Contracts.

7. Directors’ Statement

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

This announcement is dated 12 January 2022.