Instacom wins CRCC contract, orde rbook now a t RM2 b illion Decem ber 8, 2015, Tuesday Sharon Kong, [email protected]
KUCHING: Instacom Group Bhd (Instacom ) yeste rday announced tha t its subsid ia ry com pany,Vivocom Ente rprise Sdn Bhd (Vivocom ), had rece ived and accep ted the Le tte r of Award (LOA)from CRCC Malaysia Bhd for the p rovision of construction works for a ga ted com m unity housingschem e consisting of sem i-D un its, villa m ansions, apartm ent b lock and housing un its under theRum ah Se langorku schem e , in Bandar Ulu Klang, Daerah Gom bak, Se langor.
This p roject is va lued a t RM116.4 m illion and is in add ition to the con tracts to ta lling RM231m illion rece ived from CRCC Malaysia last m onth .
With th is Project, the Instacom Group has to da te successfu lly secured projects am ounting toa lm ost RM600 m illion from CRCC Malaysia .
CRCC Malaysia Berhad is owned by China Railway Construction Corpora tion Ltd , which is knowngloba lly as one of the la rgest construction en te rprises in China and the world , and ranked 80thwith in Fortune Globa l 500 com panies.
“This deve lopm ent m eans tha t we have even stronger ea rn ings visib ility un til end of 2017,” sa idInstacom ch ie f execu tive office r Dato Seri Dr Yeoh Seong Mok.
“We are in fina l negotia tions for m ore projects. Hence , the re will m ost de fin ite ly be m orecontracts secured over 2016 and 2017 and beyond ,” he fu rthe r sa id , add ing tha t the InstacomGroup’s p ipe line is e stim ated a t approxim ate ly RM2 b illion curren tly.
In line with its growing orde r book and an ticipa ted in flux of m ore projects, Instacom is curren tlyundertaking a p riva te p lacem ent of up to 10 pe r cen t of its issued and pa id-up share cap ita l toth ird party investors to be iden tified and a t an issue price to be de te rm ined la te r.
In a sta tem ent to Bursa Malaysia last week, the com pany sa id tha t, based on the ind ica tive issueprice of RM0.28 pe r Placem ent Share , the Proposed Priva te Placem ent is expected to ra ise grossproceeds of a t least approxim ate ly RM65.53 m illion .
Meanwhile , Instacom ’s share p rice cam e under heavy se lling pressure on Decem ber 3 and 4,declin ing 15 pe r cen t over the two days which ana lysts note was like ly caused by m edia reportscrea ting m arke t confusion .
The research a rm of CIMB Investm ent Bank Bhd (CIMB Research) be lieved tha t th is cou ld be dueto the num erous m edia reports about Fa ja rbaru Builde r Group Bhd (Fa ja rbaru Builde r) cla im ingtha t the group was confiden t of winn ing the RM8 b illion Gem as-Johor Baru (JB) double -track ra ilp roject.
Accord ing to CIMB Research , the reports m ay have crea ted the m arke t m isconception tha tInstacom stood to lose its position as China Railway Construction Corp’s (CRCC) subcontractor.
“A particu la r m edia report im plying tha t Instacom could be the b iggest lose r of the Fa ja rbaruBuilde r news m ay have caused fu rthe r pan ic.
Tha t m edia report has since been re tracted ,” it sa id .
CIMB Research noted tha t investors should take advan tage of the curren t p rice weakness toaccum ula te Instacom shares.
The research a rm continued to be lieve tha t Instacom is a d irect p roxy for increasing Chinesefore ign d irect investm ent in Malaysia .
All in , CIMB Research m ain ta ined the ‘add’ ra ting on Instacom and its sum of parts (SOP)-basedta rge t p rice of RM0.67 pe r share .
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