BURSA ANNOUNCEMENTS
TRANSACTIONS (CHAPTER 10 OF LISTING REQUIREMENTS): RELATED PARTY TRANSACTIONS TALIWORKS CORPORATION BERHAD - SIGNING OF JOINT VENTURE AGREEMENT BETWEEN THE COMPANY AND LGB ENGINEERING SDN. BHD.
TALIWORKS CORPORATION BERHAD |
Type | Announcement | |||||||||||||||
Subject | TRANSACTIONS (CHAPTER 10 OF LISTING REQUIREMENTS) RELATED PARTY TRANSACTIONS | |||||||||||||||
Description | TALIWORKS CORPORATION BERHAD - SIGNING OF JOINT VENTURE AGREEMENT BETWEEN THE COMPANY AND LGB ENGINEERING SDN. BHD. | |||||||||||||||
TALIWORKS CORPORATION BERHAD (“Taliworks” or “the Company”) - Signing of Joint Venture Agreement between the Company and LGB Engineering Sdn. Bhd.Further to the announcement made on 27 June 2014 on the acceptance of letter of award of Unit Perancang Ekonomi Negeri (“UPEN”) project known as “Pengagihan Semula Kapasiti Reka Bentuk Air Terawat Dari Loji Rawatan Air Sungai Selangor Fasa 3 (SSP3) – Sebagai Projek Mitigasi Kekurangan Bekalan Air di Selangor, Wilayah Persekutuan Kuala Lumpur dan Putrajaya (Pakej 3 : Kerja-kerja Membekal dan Memasang Paip Keluli Bergarispusat 1200 mm dan Kerja-kerja Berkaitan Dari Bukit Jelutong, Shah Alam ke Bukit Raja, Klang, Selangor)” (hereinafter referred to as the “Project”), the Board of Directors is pleased to announce that the Company had on 20 August 2014 entered into a Joint Venture Agreement (“JVA”) with LGB Engineering Sdn. Bhd. (“LGBE”) in the name of LGB-Taliworks JV for the purpose of undertaking and completing the supply and installation of 1200 mm diameter steel pipes from Bukit Jelutong, Shah Alam to Bukit Raja, Klang, Selangor (hereinafter referred to as the “Works”) and other ancillary works as necessary for the completion of the Works as specified in the JVA in relation to the Project. 2. DETAILS OF THE JOINT VENTURE LGBE was incorporated in Malaysia on 31 March 1978 under the Companies Act, 1965 as a private limited company and having its place of business at Level 20, Menara LGB, No.1, Jalan Wan Kadir, Taman Tun Dr. Ismail, 60000 Kuala Lumpur. It has an authorised share capital of RM25,000,000.00 comprising 25,000,000 ordinary shares of RM1.00 each and an issued and paid-up share capital of RM17,250,000.00 comprising 17,250,000 ordinary shares of RM1.00 each. LGBE is accorded with the highest grade, Grade G7, in its registration with the Construction Industry Development Board (CIDB) and certification in the Sijil Perolehan Kerja Kerajaan. The principal activity of LGBE is in the construction of civil engineering works and buildings but with particular specialization in water supply projects. There is no transaction by the Company with LGBE for the preceding twelve (12) months except for the construction and completion of Raw Water Pumping Main and Interconnection at Matang Pagar Reservoir (SSP1 project”) by the LGB-Taliworks Consortium to Taliworks Construction Sdn. Bhd. 2.2 The details of the Project
2.3 Salient Terms of the JVA
2.3.1 The percentage of participation and interest The percentage of participation and interest of the Parties as between themselves in and to the assets, liabilities, costs, profits and losses arising out of the execution and completion of the Works and under the joint venture (except as otherwise expressly agreed to the contrary by the Parties) shall be:
2.3.2 Source of Fundings The Company is to fund its portion of the total costs of the Project from progressive claims made against the employer i.e. UPEN. Any shortfall in working capital is expected to be funded from internally generated funds. The Company’s share of the value of the Project is estimated to be RM14.71 million based on the forty eight per cent (48%) participation in the joint venture. All funds or additional funds as from time to time required by the joint venture for the purpose of the Works shall be furnished by LGBE and the Company in accordance with their respective proportionate share or any revision thereof subject to the terms and conditions set out above and in the JVA thereto. 2.3.3 Termination of the JVA and the joint venture The JVA and the joint venture shall be terminated when the Project has been performed and completed and all matters outstanding (including, without limiting to the generality of the foregoing, rectification of defects and resolution of claims or disputes arising therefrom) have been dealt with in accordance with the terms of the JVA and the Project. 3. RATIONALE AND PROSPECTS FOR THE JOINT VENTURE The joint venture is in line with the ordinary course of business of Taliworks which is investment holding, provision of contracting, project and management services. The joint venture with LGBE as the lead partner is in line with the requirement of the Project that the lead partner must be graded “G7” by the Construction Industry Development Board (“CIDB”) with certification in the Sijil Perolehan Kerja Kerajaan. 4. RISKS FACTORS The Project is subject to normal construction risks which include but are not limited to changes in general economic conditions, government regulations, inflation and fluctuation of material cost and labour cost.
5. FINANCIAL EFFECT The joint venture is not expected to have any material effect on the net assets per share and gearing of the Company for the financial year ending 31 December 2014 but is expected to contribute positively to the earnings of the Group.
The directors of Taliworks (save and except for interested directors) are of the opinion that the terms of the JVA are fair and reasonable and that the joint venture is in the best interest of the Company.
Dato’ Lim Chee Meng, a substantial shareholder of the Company is deemed to be interested in the joint venture by virtue of his indirect shareholdings in LGBE.
8. PERCENTAGE RATIOS UNDER CHAPTER 10 OF THE MAIN MARKET LISTING REQUIREMENTS
The highest percentage ratio applicable to the JVA under paragraph 10.02(g) of the Listing Requirements is 1.4% based on the total project costs attributable to the Company compared to the total assets of the Company as at 31 December 2013.
The JVA is not subject to the approval of the shareholders of Taliworks and/or any regulatory authorities. 10. DOCUMENTS FOR INSPECTION The JVA is available for inspection during normal business hours from Mondays to Fridays (except public holidays) at the business address of the Level 20, Menara LGB, No.1, Jalan Wan Kadir, Taman Tun Dr. Ismail, 60000 Kuala Lumpur for a period of three (3) months from the date of this announcement.
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Announcement Info
Company Name | TALIWORKS CORPORATION BERHAD |
Stock Name | TALIWRK |
Date Announced | 20 Aug 2014 |
Category | General Announcement |
Reference No | CK-140820-627FD |