Fajarbaru keen to bid for Sepang cargo complex

KUALA LUMPUR: Fajarbaru Builder Group Bhd, which was involved in the construction of the old low-cost carrier terminal (LCCT) in Sepang, is keen to bid for the project to convert the former terminal into a cargo complex once the tender is opened.

“Once the tender [for the cargo complex development] is opened, we will definitely participate. We were the ones who developed Phase 1 and Phase 2 of (the old) LCCT,” finance director Ooi Leng Chooi told The Edge Financial Daily after the group’s extraordinary general meeting (EGM) yesterday.

When asked if the construction outfit would also be interested to bid for the construction of the second satellite terminal at the KL International Airport, Ooi said Fajarbaru “will not limit” itself and will participate in the tender if it is “viable”.

Fajarbaru’s interest in these upcoming infrastructure projects will come as no surprise as it is now a seasoned player in airport-related developments. Besides the construction of the LCCT, the company was involved in the building of the airfield pavement for parking apron at the Penang International Airport as well as constructing aircraft hangars in Sepang.

It is currently involved in the construction of five hangars at the Sultan Abdul Aziz Shah Airport in Subang and recently bagged the RM13.74 million service contract for the operation and maintenance of the visual docking guidance system at klia2.

The company’s current order book stands at RM511 million, which will keep it busy for the next two years. The value of its tender book is RM3 million.

While these numbers suggest that Fajarbaru’s short-term revenue stream is secured, it is planning for the future by diversifying its business into logging and timber trading following shareholders’ approval of the diversification route at yesterday’s EGM.

Ooi said the venture into logging and timber trading is a way “to enhance the company’s business opportunities, and the new segment will contribute 25% of the company’s bottom line for the next five years”.

To achieve this, Fajarbaru acquired a 51% stake in Billion Variety Sdn Bhd (BVSB) for RM408,000 in February 2014 and through it, acquired a 100% stake in Smooth Accomplishment Sdn Bhd (SASB) for RM1 million in April h year. Both BVSB and SASB are in the business of logging and timber trading but neither of these companies have commenced operations.

Fajarbaru also obtained shareholders’ approval to issue over 120 million new rights shares on the basis of one rights share for every two existing shares and detachable warrants on the basis of one warrant for every one rights share to raise an estimate of RM60 million.

Close to half of that amount raised through this exercise will be used for the company’s expansion into the logging and timber trading business in the next 24 months. The remainder of the funds raised will be used for Fajarbaru’s working capital.

Apart from the logging and timber business, Fajarbaru has already sown the seeds for its foray into the residential property development business. It plans to launch a high-rise residential project this year after obtaining approval from local authorities.

This article first appeared in The Edge Financial Daily, on June 25, 2014.


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