Salcon - plans to private placement

Langat 2 Water Treatment Plant Project …

On the Langat 2 water treatment plant (rm1.2 billion) in Selangor, PPAB has narrowed down the bidders to two finalists, Gamuda Bhd and a JV consisting of MMC Corp Bhd, Salcon Bhd and AZRB. Management has a 30% stake in the JV. This would bring its estimated portion in the job to rm360 million should the JV win the contract.

Tie Up With SP Setia’s Tan Si Liew …

Salcon Bhd’s tie up with Eco World Developmnet Sdn Bhd, a company linked to SP Setia Bhd’s Tan Sir Liew Kee Sin, will pave the way for the water and waste water engineering company to go big into the Johor property sector.

The company in the immediate term, will develop a rm1.2 billion mixed commercial development in Johor together with Eco World Development.

Eco World Development is an upcoming player in the property world and has Liew’s son as a director. Leong also sits on the board of Eco World Development.

The development, known as IB Festival Mall and Serviced Apartment is majority owned by Salcon.

Apart from the project in Johor Baru, Salcon has another project in Selayang with a smaller GDV of rm150 million.

Property development is expected to a significant contribution to the group’s profit from next year onwards (2014 onwards).

Eco World Development bought four parcels of land worth rm604.65 million in Johor and KL from DRBHicom.

Salcon ventured into the property business to diversify its revenue. It is opened to JV with property firms.

However Salcon has not lost its water engineering business. It has submitted bids for rm1.8 billion worth of water based contracts till June 2013. It has tendered for the Langat 2 contract in Selangor is also eyeing water jobs in Sabah and Johor.

It has an outstanding order book of rm350 million.


Private Placement …

It plans to place out at least 53.92 million new shares representing 10% of its issued base to third party’s investors.

The proceeds from the exercise will be used to finance working capital needed for the group’s real estate operations and repay debts.

The issue price will not be less than the stock’s par value of 50 sen each and expects to complete the exercise by third quarter 2013.