Introduction

Pursuant to a Memorandum Agreement dated 4 April 2017, SMHB Sdn Bhd ("SMHB"), an associate company of HEB was appointed by the Government of Malaysia to provide Construction Supervision Services for Section 5B & Section 5C2 of Package 5: Raub to Bentong, Pahang of the Central Spine Road.

HEB wishes to announce that on 28 August 2019 SMHB has received the executed copy of two (2) Supplemental Agreements dated 26 August 2018 from Government of Malaysia confirming the provision of Construction Supervision Services by SMHB for:

(a) Section 5C2: Kg Asap to Kg Sertik (“Contract A”); and

(b) Section 5B: Kg Orang Asli Sg Chandan to Kg Asap (“Contract B”);

of Package 5: Raub to Bentong, Pahang of the Central Spine Road (collectively, “Contracts”).

Information on the Contracts

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 Contracts. 

Financial Effects

The Contracts, with a combined contract value of RM10,287,461.60, are 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 Contracts 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 Contracts.

Risk Factors

The risk factors affecting the Contracts include, but not limited to execution risks, such as dependency on the progress of the construction works for Section 5C2: Kg Asap to Kg Sertik and Section 5B: Kg Orang Asli Sg Chandan to Kg Asap of Package 5: Raub to Bentong, Pahang of the Central Spine Road given that the role of SMHB pursuant to the Contracts is to supervise the execution of the same. 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 Contracts is in the best interest of HEB Group.

This announcement is dated 28 August 2019.