METRONIC HELPING FIRMS TO EXPAND IN CHINA
Company aims to diversify into power generation projects to enhance profitability
JAKS Resources Bhd is exploring more opportunities overseas, mainly in power concession deals, to enhance its profitability. Chief financial officer Steven Ang Si Eeng said the company was optimistic that power generation projects would provide a hefty recurring income for the group.
“We intend to exit the property business by diversifying into power generation,” he said after the company’s extraordinary general meeting, here, yesterday.
As of September
30, JAKS Resources’ construction outstanding order book amounted to RM850 million for local projects and RM2.6 billion for projects in Vietnam.
“Overseas power projects are normally obtained via selective or direct negotiations as they involve bigger budgets,” he added.
Ang said the development cost of the current Vietnam power generation project was US$2 billion (RM8.18 billion).
The company aims to also focus on local construction and infrastructure projects.
Meanwhile, JAKS Resources’ wholly-owned subsidiary, Premier Place Property Sdn Bhd, has disposed of its four parcels of freehold land to Sunway Supply Chain Enterprise Sdn Bhd for RM167.59 million .
JAKS Resources plans to utilise the majority of the proceeds for partial repayment of bank borrowings and working capital needs.
The 7ha plot is located within Taman Industri Sungai Penaga, here.
The company said it would realise an estimated gain of RM97.1 million from the land disposal exercise.
It sees positive interest savings of between RM4 million and RM6 million annually for the deal.
“We intend to pare down our debts by RM100 million,” he said.
Ang said the balance of the proceeds would also be used for the company’s expenses to speed up an ongoing Pacific Star project, which was expected to be completed by next year.
“With this disposal, we are signalling our main focus on infrastructure construction, mainly for the power plant project in Vietnam.
“The project gives us strong earnings. The work progress is very satisfying, above our current milestone,” he said, adding that the project would be completed in 2020.
Ang said the current construction income contributes about 80 per cent to the overall group’s profit, mainly in Vietnam.