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KUALA LUMPUR: Ho Hup Construction Company Bhd, which will be lifted from its PN17 status soon, is expected to be back on the growth path with its current property and construction projects.
“We have [earnings] visibility for another three years,” said its executive director Derek Wong Kit Leong.
The group is looking for suitable landbanks in Johor and the Klang Valley and has been in talks with several parties for land acquisition through possible joint-ventures (JV).
“We will be busy for the next three to four years with our existing projects,” said Wong.
The company’s current jobs include a contract for the design and execution of civil and electro-mechanical works for the Al-Zuhour water treatment plant and a road project in Iraq as well as the development of its remaining 50 acres (20.2ha) of land in Bukit Jalil, Kuala Lumpur.
Speaking to the media after the company’s EGM yesterday, Wong said the water treatment plant in Iraq is about 20% complete and the group has two more years to complete it. The one-year road project, on the other hand, is 50% complete.
Wong said details on the proposed development of the 50 acre tract in Bukit Jalil would be announced soon by Ho Hup’s JV partner, Malton Bhd.
He added that Ho Hup would be entitled to 18% of the total gross development value from Malton’s side of the project, which would be a mixed development.
The group is also looking at bidding for infrastructure projects that would be offered by the government.
At yesterday’s EGM, Ho Hup’s creditors and shareholders approved its proposed restructuring exercise to regularise its financials.
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| Wong: We will be busy for the next three to four years with our existing projects. |
Under the exercise, Ho Hup’s unsecured creditors would be repaid in full by a proposed issuance of 136 million redeemable convertible preference shares (RCPS) at an issue price of 50 sen each.
As part of its restructuring exercise, the group will also undertake a capital reduction to reduce its share par value to 50 sen from RM1. This will result in a credit of RM51 million which will be utilised to reduce the group’s accumulated losses of RM158.7 million, as at Dec 31, 2012.
“Once we come to the end of the restructuring, we will apply to Bursa Malaysia to uplift the PN17 status and because we have recorded five quarters of profit and have shown a good historical track record, we hope for an early uplift as the rule is to complete two quarters of consecutive profits.
“After the restructuring exercise has been completed, Ho Hup will have land and no debts. Whatever is thrown to us after that is pure cash and we need to put the cash to work,” said Wong.
This article first appeared in The Edge Financial Daily, on October 11, 2013.
