Introduction

HEB wishes to announce that its associate company, SMHB Sdn Bhd (“SMHB”) has on 10 December 2019 accepted a Letter of Acceptance dated 29 November 2019 from the Malaysian Ministry of Water, Land and Natural Resources appointing SMHB to provide Consultancy Services for the Engineering Design and Construction Supervision for “Projek Penyaluran Air Mentah” Layang 2, Johor (“Project”)(“Contract”). 

Information on the Contract

The Contract, with a contract value of RM4,927,342.50 will be commencing in the fourth quarter of 2019  and is expected to complete within the first quarter of 2024, inclusive of  Defect Liability Period of 15 months.

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 2019 and 31 December 2024.  

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 Project given the role of SMHB pursuant to the Contract is to design and supervise the execution of the works for the Project. 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 10 December 2019.