FFB BAGS CONTRACTS WORTH RM80.4M
Firm also in midst of buying controlling stakes in 4 engineering firms
CONSTRUCTION crane manufacturer Favelle Favco Bhd (FFB) has secured several purchase order contracts amounting to RM80.4 million through subsidiaries Favelle Favco Cranes Pty Ltd (FCPL) and Favelle Favco Cranes (M) Sdn Bhd (FFC).
According to a Bursa Malaysia filing, FCPL has secured a contract to supply tower cranes to Multiplex Constructions Pty Ltd and a contract to supply offshore cranes to SMC Plant & Equipment Pty Ltd.
Meanwhile, FFC secured jobs from Malaysia Marine and Heavy Engineering Sdn Bhd and Emdad LLC to supply offshore cranes.
FFB said the contracts are expected to contribute positively to its earnings and net assets for the financial year ending December 31 and beyond.
The contracts do not have any impact on the share capital and shareholding structure of FFB.
Earlier this month, FFB told Bursa Malaysia it planned to acquire controlling stakes in four engineering firms with businesses in the oil and gas sector for RM87.4 million.
The company had inked a heads of agreement with a group of individuals to buy 70 per cent equity interest in Exact Automation Sdn Bhd, Sedia Teguh Sdn Bhd, Exact Analytical Sdn Bhd and Exact Oil & Gas Sdn Bhd.
The target companies made a combined net profit of RM15.3 million in the financial year ended December 31 2016.
FFB said the company might pay an incremental purchase consideration over financial years 2017 to 2019, in addition to the price of RM87.4 million, if the target companies achieved certain cumulative profit thresholds for the three financial years.
All parties involved have agreed to negotiate exclusively for at least three months before a more concrete share sale agreement is signed under the heads of agreement.
“The board believes that this proposed acquisition of the target companies will enhance and widen the earnings base of the Favco group. The group’s international network will also provide synergies to the future business growth of the target companies,” said FFB.