Eonmetall secures loans for phase one of FGV mills deal

PETALING JAYA: Eonmetall Group Bhd has secured bank borrowings to finance the first phase of the project to build, own, operate and transfer (BOOT) palm fibre oil extraction plants at six selected mills for FGV Holdings Bhd which would require RM8.8 million per project.

The group told the stock exchange that it has secured the financing facility to undertake BOOT for the first phase of the job, for all the six plants.

“Financing arrangements for the second phase mills will be discussed upon securing of the BOOT arrangement for the same under similar terms and conditions for the first phase mills,” it said.

The project could start any time and the first phase has to be completed within 24 months at maximum.

The project was awarded to Eonmetall’s wholly owned unit Eonmetall Carotene Oil Sdn Bhd (ECOSB) by FGV via its indirectly owned unit Felda Palm Industries Sdn Bhd (FPISB).

Eonmetall said in a Bursa Malaysia filing dated Oct 4, that the two parties will enter into six separate agreements in relation to the BOOT arrangement for all the plants at the designated mills.

ECOSB will own and operate them for a concession period of 10 years, before its ownership is transferred to FPISB.

“The group expects the BOOT arrangement to contribute materially to both revenue and bottom line of ECOSB during the entire concession period for First Phase Mill with resulting positive impact to net assets and lowering of gearing,” it said.

Nonetheless, the group is mindful that the anticipated return is still subject to operating conditions such as rate of plant utilisation, total quantity of palm mesocarp fibres supplied to the plant for processing as well as crude palm oil price, among others,” it added.