Introduction

HEB wishes to announce that its associate company, HSS Integrated Sdn Bhd ("HSSI"), has on 27 August 2019 accepted a Letter of Award dated 26 August 2019 from KA Petra STS Hub Sdn Bhd (“Client”) appointing HSSI to provide Engineering and Project Management Consultancy Services for the Proposed Ship-to-Ship (STS) Hub at Johor Bahru Port Waters (“Contract”).

The Contract was awarded following the Approval in Principle secured by KA Petra Sdn Bhd (the Client’s holding company) from the Ministry of Transport Malaysia on 19 February 2019, to undertake studies in relation to the construction and operation of a STS Hub in Johor Bahru Port Waters.

Information on the Contract

The Contract commenced from 2 May 2019 and is expected to complete within the fourth quarter of 2022, inclusive of 12 months Defect Liability Period.

The estimated total contract value is RM16,000,000 comprising of:

(a) RM9,000,000 for Engineering and Project Management Consultancy Services; and

(b) RM7,000,000 being budgetary fee for full time supervision during construction period.

Pursuant to the exclusive teaming arrangement between HSSI and HSS Engineering Sdn Bhd (“HSSE”), a wholly-owned subsidiary of HEB, HSSI and HSSE 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 2019 to 31 December 2022.  

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 Proposed Ship-to-Ship (STS) Hub Project and the signing of the Concession Agreement between the Client and the Government of Malaysia, given the role of HSSI pursuant to the Contract.

Nonetheless, HEB Group has, throughout the years, established its track record and expertise in undertaking such projects. 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 is in the best interest of HEB Group.

This announcement is dated 27 August 2019.