ML Global inks shareholders' agreement with China's Sany Group for JV business

KUALA LUMPUR (Dec 5): ML Global Bhd has inked a shareholders' agreement with China's Sany Group Co Ltd to form a joint venture company (JVco) to manufacture precast concrete (PC) panels for building projects.

ML Global told Bursa Malaysia in a filing that the shareholders' agreement was inked today via its wholly-owned MITC Engineering Sdn Bhd, with Sany Construction Industry Development (M) Sdn Bhd ù an indirect 70%-owned unit of Sany Group.

This follows the signing of a Memorandum of Understanding between the two on July 17 this year that paved the way for the final agreement today.

Via its core subsidiary Sany Heavy Industry Co Ltd, Sany Group is the sixth-largest heavy equipment manufacturer in the world and a PC expert in the construction industry. Currently, Sany Heavy Industry is the largest provider for PC equipment solutions in China, accounting for a 50% market share.

MITC Engineering will hold a 51% stake in the JVco, to be known as MGB Sany (M) IBS Sdn Bhd, while Sany Construction will hold the remaining 49%.

The JVco's initial issued and paid-up capital will be RM4 million. ML Global said its subscription of the JVco's stake will be funded internally.

The JVco's primary objective is to design, produce, make, sell and install PC products in housing and commercial developments, principally for LBS Bina Group Bhd and its related companies. It will also venture into ancillary and consequential business directly or indirectly connected to the business of PC products.

Under the partnership, MITC Engineering shall guarantee the use of the JVCo’s PC in its construction of up to 10,000 units of properties over the next five years — which is not less than 800 units per year — starting from the operational date of a factory that will be set up by the JVco.

In return, Sany Construction will provide technical know-how of all aspects of PC to the JVco, including design, manufacturing, installation and use of PC and its machineries. Sany Consruction shall also have the right of first refusal in supplying all machines required by ML Global.

"The shareholders' agreement represents a platform for ML Global to tap business opportunities and investment into the IBS precast manufacturing business. This will improve ML Global's competitiveness in the construction industry, as it is expected that this investment would reduce dependency on manual labour and costs, and produce higher quality products as well as minimise duration for construction of properties," ML Global said. — theedgemarkets.com

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