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YFG's RM40m contract with Atta Global unit terminated

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KUALA LUMPUR (Dec 15): YFG Bhd has received a termination letter from Atta Global Group Bhd's unit Atta Properties Sdn Bhd to stop construction works for a RM40 million project on Jalan Sultan Azlan Shah, Penang.

YFG said the notice of termination was served to its wholly-owned subsidiary YFG Engineering Sdn Bhd owing to some legal and financial issues, which currently affect the progress and sub-contractor of the project on the part of Atta Properties.

In a filing with Bursa Malaysia yesterday, YFG said YFG Engineering had on Dec 13 received the notice of termination from Atta Properties.

"The company is seeking legal and other advices on the (matter)," it added.

However, YFG assured that the termination is not expected to have any material effect on the group's earnings, net assets and gearing for the financial year ending Sept 30, 2019 as the project was at the initial stage of commencement.

The contract, issued on Aug 10, entailed the construction of a 23-storey building comprising 62 units of apartments and 38 units of offices for Atta Global's 55%-owned subsidiary Tetap Gembira Development Sdn Bhd.

Under the contract award, the project was scheduled to commence on Oct 1 for a period of 24 months.

The RM40 million construction job is not the only one awarded by Atta Global to YFG. On Sept 9, YFG had bagged a RM30 million contract to build a 14-storey apartment building housing 112 units, and eight units of three-storey terrace houses in Butterworth.

Shares of YFG, a Practice Note 17 company, last closed at half a sen on March 21, giving it a market capitalisation of RM3.05 million. — theedgemarkets.com

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