NWP aims to appoint China-based contractors for its construction jobs

KUALA LUMPUR (Sept 20): NWP Holdings Bhd is keen to appoint China-based contractors for the RM744.96 million affordable housing projects for which it had signed a turnkey construction heads of agreement (HoA) earlier this month.

“There are a few parties that we are in discussion with now, they are mainly GLC (government-linked companies) from China and these construction companies need a job now,” NWP’s newly-appointed executive director Datuk Seri Nelson Kee Soon Ling told pressmen yesterday after the group’s extraordinary general meeting.

On Sept 7, NWP announced that it had entered into a turnkey construction HoA with M2B World (M) Sdn Bhd to undertake construction work for six affordable housing projects worth a combined RM744.96 million.

In the next two to three years, Kee said construction business will be the main revenue contributor to the group.

“We already have talent in place, and our clients are government bodies like SPNB (Syarikat Perumahan Negara Bhd) and PR1MA (Perumahan Rakyat 1Malaysia) Bhd,” he said adding that NWP is confident that it will succeed in its venture into the construction business.

Kee also said NWP’s application for a Class G7 contractor licence with the Construction Industry Development Board is progressing well and the group expects to secure the said licence within the “next two weeks”.

The licence will enable NWP to tender for government and private sector projects of any size and amount.

Nevertheless, a check with the Companies Commission of Malaysia showed that M2B World, which is poised to be project manager of the affordable housing projects, suffered a net loss of RM3,383 from zero revenue for its financial year ended June 2015.

NWP which processes timber and makes timber products, has been loss making for the last 10 fiscal years since financial year ended Aug 31, 2006.

But Kee, who emerged in NWP with a substantial stake of 11.48% on May 5 this year, is unfazed by its poor record.

“Time will tell,” Kee said, confident that the agreements which NWP entered into will materialise.

“Everything is still ongoing, even the MoUs (memorandum of understandings) we signed in July, the discussion is still ongoing, we are about to finalise in the next two months,” he said.

NWP inked two MoUs back then, the first may result in it being appointed as the main contractor of a proposed development comprising 160 serviced suites in Melaka, while the second is to form a strategic partnership with another company for future construction projects.

“That is why we proposed a series of fundraising exercises lately, because we need cash flow to kick-start these projects,” Kee added.

Subsequent to the announcements on the MoUs, NWP proposed a private placement of 10% of the group’s existing issued and paid-up share capital to raise necessary funds both to undertake new contracts and for working capital.

Kee, who is also the chief executive officer and 25% shareholder of property agency GS Realty Sdn Bhd, told The Edge Financial Daily that NWP’s management is considering renaming the group to bear the brand of the agency.

“We are considering it and we will make a decision soon,” he said, but did not provide a specific timeline.

Shares of NWP rose half sen or 1.82% to close at 28 sen yesterday, with a market capitalisation of RM89.6 million.

Note that NWP’s shares have been trading within the range of 10 sen and 65 sen in the past 52 weeks.

On Sept 9, it received an unusual market activity query after its share price fell by 22.08% to 30 sen the day before.

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This article first appeared in The Edge Financial Daily, on Sept 20, 2016. Subscribe to The Edge Financial Daily here.