KUALA LUMPUR (Aug 15): Practice Note 17 (PN17) company YFG Bhd has bagged a RM235 million contract to build apartments in Kajang, Selangor but lost the RM245 million subcontract for PR1MA homes in Pedas, Rembau, Negeri Sembilan.

The PR1MA (1Malaysia People’s Housing) project, which was awarded to YFG on Feb 16, was terminated by Wearegold Sdn Bhd (WRG) as the latter is not able to take part in its proposed regularalisation plan due to unforeseen reasons, it said in a Bursa Malaysia filing yesterday.

“In view of the foregoing, YFG and WRG hereby mutually agree to terminate the contract with immediate effect. This termination is not expected to have any material effect on the earnings, net assets and gearing of the company and the group for the financial year ending Sept 30, 2017 (FY17) as the project did not commence,” it said.

If the project had taken off, it would have involved the construction of 1,572 single- and double-storey link houses and contributed positively to the loss-making mechanical and electrical service provider’s FY17.

Meanwhile, the Kajang apartment project, which involves the building, and infrastructure and landscaping works for the proposed development, is expected to contribute positively to its revenue and earnings for FY18 and beyond.

YFG said its wholly-owned subsidiary YFG Engineering Sdn Bhd got the letter of award from Pierre Suite (M) Sdn Bhd for the project yesterday.

It added that the project would start on a date to be notified in writing by Pierre Suite and to be completed within 36 months from the commencement date.

YFG fell into the PN17 category in 2015 after auditors expressed an emphasis on the company’s and its subsidiaries’ ability to continue as a going concern, after its shareholders’ equity as at June 30, 2014 fell to less than 50% of its issued share capital.

YFG shares closed unchanged at five sen yesterday with a market capitalisation of RM30.4 million.

This article first appeared in The Edge Financial Daily, on Aug 15, 2017.

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