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Execution Of A Joint Venture And Shareholders' Agreement Between HSS Engineering Sdn Bhd And Opus International (M) Berhad For The Incorporation Of A Joint Venture

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Type Announcement
Subject OTHERS
Description HSS ENGINEERS BERHAD ("HEB" OR "THE COMPANY")

EXECUTION OF A JOINT VENTURE AND SHAREHOLDERS' AGREEMENT BETWEEN HSS ENGINEERING SDN BHD AND OPUS INTERNATIONAL (M) BERHAD FOR THE INCORPORATION OF A JOINT VENTURE

1. INTRODUCTION

 

The Board of Directors (“Board”) of HEB is pleased to announce that on 22 October 2024, HSS Engineering Sdn Bhd [Registration No. 199701035253 (450753-X)] (“HSSE”), a wholly owned subsidiary of HEB, entered into a Joint Venture and Shareholders’ Agreement (“JVA”) with OPUS International (M) Berhad [Registration No. 198601004999 (154159-T)] (“OPUS International”). The JVA facilitates the incorporation of a joint venture company (“JV Company”) to jointly provide engineering and technical services in the areas of engineering, construction, asset management, and energy efficiency projects. The JVA also outlines the rights and responsibilities of both parties involved in this collaboration (“the Collaboration”). The JV Company will be named “OPUS-HSS Sdn Bhd” or a mutually agreed alternative if the preferred name is unavailable.

 

OPUS International is a wholly-owned subsidiary of OPUS Group Berhad which in turn is a wholly-owned subsidiary of UEM Edgenta Berhad.

 

(HSSE and OPUS International are collectively known as “the Parties”)

 

2. INFORMATION ON OPUS INTERNATIONAL (M) BERHAD, OPUS GROUP BERHAD AND UEM EDGENTA BERHAD

 

2.1 UEM EDGENTA BERHAD (“UEM EDGENTA”) and OPUS GROUP BERHAD

 

UEM Edgenta is a public company limited by shares, incorporated and registered in Malaysia and listed on the Main Market of Bursa Malaysia Securities Berhad. It is primarily owned by UEM Group Berhad, which itself is a wholly owned subsidiary of Khazanah Nasional Berhad, the sovereign wealth fund of Malaysia. This structure highlights UEM Edgenta’s strong backing and strategic importance within the national infrastructure and service sectors.

 

Operating within the UEM Group, UEM Edgenta is a leading Asset Management and Infrastructure Solutions company in the region whose expertise covers healthcare support, property and facility solutions, infrastructure services, technology innovation, and asset consultancy. UEM Edgenta has operational presence in Malaysia, Singapore, Indonesia, Taiwan, United Arab Emirates and the Kingdom of Saudi Arabia.

 

Leading UEM Edgenta's Asset Consultancy division is the OPUS Consultants group. OPUS Group Berhad, a wholly owned subsidiary of UEM Edgenta, serves as the holding company for the OPUS Consultants group of companies.

 

2.2 OPUS INTERNATIONAL (M) BERHAD (“OPUS INTERNATIONAL” OR “OIM”)

 

OPUS International, a subsidiary wholly owned by OPUS Group Berhad, is incorporated and registered in Malaysia and operates as part of the OPUS Consultants group of companies. The principal activities of OPUS International are the management, planning, design and construction of infrastructure projects and provision of facilities management services. OPUS International brings over three decades of expertise and a distinguished track record in delivering key infrastructure and landmark projects across diverse sectors. These include highways, roads, bridges, rail, transportation, built environment and infrastructure master planning. In addition, OPUS has an extensive track record in sustainability, energy efficiency and renewable energy projects.

 

3. INFORMATION ON JV COMPANY

 

The JV Company will be a company incorporated and registered in Malaysia. The principal activities of the JV Company are:-

a) to provide engineering and project management consultancy and advice and other ancillary services relating to engineering and construction projects;

b) to provide assets management consultancy and advise and related services;

c) to provide energy efficiency and sustainability related services; and

d) such other businesses as the Parties may mutually agree.

    (collectively the “Business”)

 

The equity proportion of the JV Company shall be allocated according to the following shareholding percentages:

 

 Parties

 Shareholding Percentage (%)

 OPUS International

 60

 HSSE

 40

 Total

 100

 

Fulfilment of the equity requirements in the JV Company shall be met through cash contributions by the Parties.

 

4. SALIENT TERMS OF THE JVA

 

 No.

 Items

 Details

1.

Directors

The Board of the JV Company shall consist of a total of five (5) directors, with three (3) directors nominated by OIM and two (2) directors nominated by HSSE. Decisions within the JV Company will generally be made by majority vote. However, significant decisions—such as changes to share capital, obtaining additional borrowings, dividend policies and distributions, key employment decisions, and other material matters—shall be classified as Board Reserved Matters. These significant decisions require the approval of at least one (1) director nominated by HSSE and one (1) director nominated by OIM.

 

2. 

Total Capital Outlay

The total capital required for the JV Company will be determined on a project-by-project or case-by-case basis, reflecting the ongoing operations of the JV Company. To guide its operations, strategic initiatives, project execution, and financial management, a comprehensive budget and business plan will be adopted annually and must be approved by the Board of the JV Company.

 

3.

Additional Financial Accommodation

If the JV Company requires additional financial accommodation, the financing may be arranged as determined and approved by the Board of the JV Company, including but not limited to:

a) Borrowings and loans from financial institutions;

b) Loans from the shareholders in agreed proportions and terms;

c) An increase in the issued share capital of the JV Company (including the issuance of preference shares) in proportion to the agreed shareholding percentages of the shareholders or other proportions as may be mutually agreed upon by the Parties.

 

4.

Dividend Distribution

The Parties shall exercise their powers to ensure profits are distributed as dividends in proportion to the paid-up value of shares at the time of distribution, in compliance with all legal requirements.

 

 

5. RATIONALE OF THE COLLABORATION

 

The strategic partnership between and OPUS International is a pivotal development for HEB, aligning seamlessly with HEB's overarching growth strategy. This Collaboration will leverage OPUS International's robust brand and its leadership in asset management to significantly enhance HEB's operational presence across national and global markets within the infrastructure and sustainability sectors. By further capitalizing on the collective expertise of HEB and its subsidiaries and associates (collectively known as “HEB Group”) in engineering design and project management, this Collaboration is designed to boost project delivery capabilities and drive growth in dynamic environments.

 

Additionally, the Collaboration will foster a knowledge exchange, enabling HSSE and OPUS International to share their respective expertise.

 

Moreover, by incorporating OPUS International’s innovative strategies, such as Energy Performance Contracting (EPC) and Green Performance Contracting (GPC), into HSSE’s offerings, this Collaboration is set to significantly enhance the market competitiveness of both firms. It will also advance their commitments to environmental stewardship and excellence in infrastructure development. This strategic alliance is poised to drive substantial growth and expand the capabilities of both HSSE and OPUS International in their joint and individual endeavors.

 

6. FINANCIAL EFFECTS OF THE COLLABORATION

 

i. Share Capital and Substantial Shareholders’ shareholdings

 

The Collaboration will not have any effect on the issued and paid-up share capital and the substantial shareholders’ shareholdings of HEB as it does not involve any issuance of new shares by HEB.

 

ii. Earnings Per Share

 

The Collaboration is not expected to have any material effect on the earnings per share of HEB Group for the financial year ending 31 December 2024.

 

iii. Net Assets Per Share and Gearing

 

The Collaboration will not have any material effect on the net assets per share and gearing of the HEB Group.

 

7. LIABILITIES TO BE ASSUMED

 

HEB will not be assuming any liabilities pursuant to the Collaboration.

 

8. SOURCE OF FUNDING

 

HSSE intends to fund the Business and the cost of Collaboration through the internally generated funds and/or external borrowings.

 

9. RISK FACTORS

 

The Company does not expect any material risk arising from the Collaboration other than the normal operational risk associated with it which HSSE would take appropriate measures to mitigate it.

 

10. APPROVAL REQUIRED

 

The Collaboration, being part of the ordinary course of business of HEB Group, is not subject to the approval of the shareholders of HEB and any other relevant regulatory authorities.

 

11. DIRECTORS’ AND/OR MAJOR SHAREHOLDERS’ INTERESTS AND/OR PERSONS CONNECTED WITH THEM

 

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

 

12. DIRECTORS’ STATEMENT

 

The Board of HEB, after considering the terms and conditions of the JVA and all aspects of the Collaboration, is of the opinion that the JVA and the Collaboration are in the best interest of HEB Group and the terms and conditions of the JVA is fair, reasonable and on terms that are not detrimental to the interest of the minority shareholders of the Company.

 

13. DOCUMENTS AVAILABLE FOR INSPECTION

 

The JVA is made available for shareholders’ inspection at the registered office of the Company at 12th Floor, Menara Symphony, No. 5, Jalan Professor Khoo Kay Kim, Seksyen 13, 46200 Petaling Jaya, Selangor Darul Ehsan, Malaysia during normal business hours from Monday to Friday (except for public holidays) for a period of three (3) months from the date of this announcement.

 

This announcement is dated 22 October 2024. 

 


Announcement Info

Company Name HSS ENGINEERS BERHAD
Stock Name HSSEB
Date Announced 22 Oct 2024
Category General Announcement for PLC
Reference Number GA1-17102024-00011
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