Its wholly-owned unit Serba Dinamik International Ltd (SDIL) has inked a joint venture agreement (JVA) with Tanzanian company, water-related solution supplier Junaco (T) Ltd (JTL), for the development of the 45-tonnes-per-day plant that will be located on an industrial plot in the Msufini Area, in the Kibaha District Coast Region.
To undertake the project, Serba Dinamik and its partner will set up a special purpose vehicle in Dubai known as Msufini LLC, which will fully own the plant. SDIL will have a 25% stake in Msufini, while JTL will own the remainder.
“Through this JVA, we will be able to expand our business into a new region that is Tanzania, which will ultimately expand our brand recognition into Africa for the first time. We are proud to be able to participate in the engineering, procurement, construction and commissioning (EPCC) works, which is valued at approximately RM295.26 million (US$69.8 million).
“Upon completion of EPCC works and as part of the JVA, SDIL will be appointed as an operation and maintenance (O&M) operator under the O&M agreement for 10 years plus additional 5 years, which will enable SDIL to benefit from a steady income flow in the long term,” said Serba Dinamik’s group managing director/group chief executive officer Datuk Dr Mohd Abdul Karim Abdullah in a statement today.
JTL is a subsidiary of water utility company Junaco Group of Companies Ltd and supplies water meters, water pumps, water treatment chemicals as well as pipes and fittings. It is also involved in the importation and installation of firefighting equipment for the Tanzanian market.
“We believe this proposed JVA will further enhance our
earnings and earnings per share in the future through its shareholdings in the
joint venture company and contribution from our EPCC and O&M works,” said
Mohd Abdul Karim Abdullah.
Serba Dinamik expects the JVA to be completed by the first quarter of 2018. The group’s share price closed unchanged at RM2.33 today, for a market capitalisation of RM3.11 billion.
Source: The Edge Markets