Ageson to rely on partners, subcontractors to fulfil RM27.5b sand supply deal

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Posted May 11, 2020

KUALA LUMPUR (May 9): Ageson Bhd’s unit Esa Pile Sdn Bhd, which has no sand mining operations, will leverage on long-established partners and experienced subcontractors in the sand business to fulfil the RM27.5 billion contract from Guangzhou Kaishengda Industrial Co Ltd (GKI).

Replying to a query from Bursa Malaysia yesterday on its May 4 announcement, the company said the partners had obtained approved permit for the export of sands.

Esa Pile, it said, would rely on the technical expertise of the subcontractors that had experience in dredging, channel deepening, desilting and declogging projects and sand washing operations in the Southeast Asia region.

The company also said the river and sea sand to fulfil the purchase order over a 15-year period would come from Terengganu and Pahang.

Ageson, which changed its name from Prinsiptek Corporation Bhd last November, said the purchase order would result in the construction and property development group diversifying into the sand supply business.

“The company expects the supply of sands to GKI to contribute more than 25% or more of the net profits of Ageson and its subsidiaries’ net profit and/or result in a diversion of 25% or more of the group’s net assets for the financial year ending June 30, 2021,” it told the exchange operator.

On its source of funds to finance its new business, it said: “The company will finance the working capital for the supply of sand through internally generated funds, bank borrowings and/or collection of stages of works payment from the issuing bank of GKI throughout the project period of 15 years.”

The breakdown of the source of funding would only be determined later and would depend on, among others, the company’s cash reserves and future funding requirement, it added.

Source: edgeprop