Benalec wins 2,123ha land reclamation job

KUALA LUMPUR (Nov 11): Benalec Holdings Bhd on Thursday announced that it has received approvals for reclamation works totalling 5,245 acres (2,122.6ha) in Pengerang and Tanjung Piai, Johor.

The company said the Economic Planning Unit of Johor (UPENJ) had awarded two of its subsidiaries, Spektrum Budi Sdn Bhd and Spektrum Kukuh Sdn Bhd, approval letters for reclamation works on 1,760 acres in Pengerang and 3,485 acres in Tanjung Piai respectively.

"The projects will be undertaken to facilitate the development of petroleum and petrochemical hubs and maritime industrial parks," Benalec told Bursa Malaysia.

No details were given as the value of the project, or how much of the reclaimed land will accrue to Benalec.

Benalec has a market capitalisation of RM1.04 billion.

Benalec said formal agreements with the Johor government will be subject to a detailed analysis of the projects, a feasibility study and detailed environmental impact assessment report. The approvals received will be valid for six months, it said.

It added that the projects are expected to contribute positively to the company's earnings and net assets from its FY13 onwards.

Benalec's partner in the two companies is the crown prince of Johor, Tunku Ismail Idris Tunku Ibrahim.

Tunku Ismail and Daing A Malek Daing A Rahaman are directors of Spektrum Kukuh and Spektrum Budi, and they hold the remaining stakes of 21% and 9% respectively in the two companies awarded the contracts, according to an earlier announcement by Benalec.

Benalec had last week acquired a 70% stake in each of the two companies for a nominal sum of RM7,000 each.

The announcement by Benalec confirms speculation, including a report in The Edge Financial Daily on Thursday. The project will be the single biggest reclamation job for the company, and the first major one outside its traditional base of Melaka, where it has reclaimed over 2,000 acres, mostly for mixed development use.

The company undertook its first reclamation job in Langkawi, Kedah in 2000, followed by one in Port Klang in 2003, but has since focused mostly on Melaka.

Benalec shares will resume trading today after a one-day suspension on Thursday.

The counter closed five sen higher at a three-month high of RM1.41 with 15.29 million shares traded on Wednesday, prior to the suspension.

According to Bloomberg data, the stock has three "buy" calls and one "sell" with an average target price of RM2.08.

Benalec had announced at end-October that it had secured a contract worth RM36.6 million to reclaim 60 acres in Pulau Koney, Alor Gajah, Melaka.

The company's core activities are in marine construction, vessel chartering and marine transport.

For its FY11 ended June 30, it registered a net profit of RM96.08 million and revenue of RM214.49 million.

Marine construction accounted for the bulk of its FY11 revenue, followed by vessel chartering and ship maintenance and shipbuilding.

Revenue for its 4QFY11 rose 29% to RM14.8 million from a year ago mainly due to an increase in marine construction income.

The company previously said it was in the process of bidding for land reclamation works with a combined estimated value of RM8 billion.

It had an unbilled order book of RM590 million, according to a recent AmResearch report, before the latest developments.

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