Nexgram wholly-owned Intra Binary S/B awarded RM338.8 mil Letter of Offer by Oriental Mace S/B on AJ Group EPC project [3 Mar 2017]

3 March 2017 – The Board of Directors of Nexgram is pleased to announce that Oriental Mace Sdn. Bhd. (“OMSB”), the existing EPC Contractor under the EPC Projects Agreements (as defined herein) has issued its Letter of Offer dated 11 February 2017 (“LO”), inviting Intra Binaraya Sdn. Bhd., a wholly-owned subsidiary of the Company (“IBSB”) to be appointed as the Principle Contractors also referred as EPC Main Contractor (“EPC Principle Contractor”) to undertake the following projects listed in the Engineering, Procurement and Construction Contracts and the supplemental agreements entered between AJ Biologics Sdn. Bhd., AJ Research & Pharma Sdn. Bhd. and AJ Research Center Sdn. Bhd. (“AJ Group”) with OMSB (“EPC Projects Agreements”) for a total contract sum of USD 77 million equivalent to RM338.8 million only (“Proposed Appointment”):-

  1. to build a vaccine manufacturing plant on a piece of land held under title H.S. (D) 224177, Lot No. PT886, Bandar Baru Enstek, District of Seremban, State of Negeri Sembilan;
  2. to build a pharmaceutical and neutraceutical manufacturing plant on a piece of land held under title H.S. (D) 224180, Lot No. PT 889, Bandar Baru Enstek, District of Seremban, State of Negeri Sembilan; and
  3. for the construction of a research and development laboratory and formulation development centre on a portion of land held under title H.S. (D) 224180, Lot No. PT 889, Bandar Baru Enstek, District of Seremban, State of Negeri Sembilan.

(collectively referred to as “EPC Projects”)

OMSB had previously issued a letter of offer in respect of the EPC Projects to Versatile Creative Berhad (“VCB”) for the purpose of appointing the main contractor on 26 May 2016. The letter of offer was subsequently voided and terminated by OMSB with effect from 19 January 2017.

IBSB has accepted the LO on 2 March 2017. Pursuant to the LO, IBSB shall act as the EPC Principle Contractor to undertake the EPC Projects in place of OMSB for the full contract sum as provided under the EPC Projects Agreement. The proposed appointment of IBSB as the EPC Principle Contractor shall consist of contractor obligation to be fulfilled by OMSB as follows:-

  1. Settlement of all payment outstanding, due and owing to the contractors or suppliers or any parties in the course of undertaking the EPC Projects (“Outstanding Payment”) by OMSB prior to the LO and OMSB shall undertake to settle and pay all the Outstanding Payment prior to the execution of the LO;
  2. Upon acceptance of the LO and pending the determination of OMSB as the EPC Contractor, OMSB shall ensure all payments received from AJ Group under the EPC Projects Agreements (if any) shall be made directly to IBSB and OMSB shall have no rights or claims whatsoever on any such payment;
  3. Upon receiving the instruction from AJ Group, OMSB shall assign the unutilised monies received or collected under the existing EPC Projects Agreements from AJ Group by OMSB and any shortfall therefrom (“Unutilised Monies”) to IBSB’s designated bank account which is to be opened and maintained by IBSB;
  4. IBSB has the right to verify OMSB’s EPC project account to ensure the monies are rightfully used for the execution of the project. Any dispute or shortfall shall be undertaken by OMSB;
  5. Upon fulfilment of all the above mentioned terms and conditions by OMSB to be completed within 90 days. AJ Group may further engage IBSB as the EPC Principle Contractor for the EPC Projects, where OMSB shall accept and shall have no rights or claims whatsoever.

The duration of the EPC Projects shall be up to 24 months upon the signing of the definite agreement.

NEXGRAM does not foresee any exceptional risk other than the normal operational risk associated with the LO and will take the necessary steps to mitigate the risks as and when it occurs.

None of the directors and/or major shareholders and/or persons connected to them has any interest, direct or indirect, in the Proposed Appointment.

The Proposed Appointment is expected to contribute positively to the future earnings of the Group.

The Board of Directors of NEXGRAM is of the opinion that the Proposed Appointment is in the best interest of the Group.

This announcement is dated 3 March 2017.

source: http://www.bursamalaysia.com/market/listed-companies/company-announcements/5356281