KUALA LUMPUR (June 5): Vivocom Intl Holdings Bhd's share price loses ground further this morning, down by 11.5% shortly after the opening bell following the news the company's RM474 million construction contract for a development in Klang has hit a snag.

As at 10:45am, Vivocom dropped 1.5 sen, or 11.54%, to an intra-day low of 11.5 sen. The stock saw some 33 million traded so far, making it the most actively traded stock on Bursa Malaysia.

Its warrant B (Vivocom-WB) was the fifth most actively traded counter, with 20.18 million units changing hands. The warrant price also headed south, declined by 0.5 sen or 12.5% to 3.5 sen.

The Edge Weekly has in its latest issue reported that Vivocom's sub-contract for Gateway Klang (formerly known as One Gateway Klang), a commercial development project, has hit a snag due to delay in payments by the project's developer Lagenda Erajuta Sdn Bhd to the main contractor CRCC Malaysia Bhd. The sub-contract is awarded by CRCC Malaysia to Vivocom.

CRCC Malaysia is a subsidiary of China's state-owned China Railway Construction Corporation (CRCC).

Citing a mutual determination letter dated April 27, 2016, The Edge Weekly reported Lagenda owed an outstanding amount of RM15.21 million to CRCC Malaysia. This led to CRCC Malaysia suspending construction works for Gateway Klang.

During a site visit by The Edge Weekly last week, there were no construction activities going on nor machineries other than leftover half-way built pillars and underbrush.

Lagenda had in April 2014 awarded Gateway Klang's construction work to CRCC Malaysia as the main contractor, which, according to Vivocom, has sub-contracted the job to its wholly-owned subsidiary Vivocom Enterprise Sdn Bhd.

Vivocom's share price has been on slippery downhill since late August last year. The stock has more than halved from last year's peak of 29 sen.

Vivocom, formerly known as Instacom Group Bhd, had attracted keen interest in the past two years as it was perceived as a proxy to ride on CRCC's jobs in Malaysia. — theedgemarkets.com

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