Ekovest construction order book rises to RM13 bil

This article first appeared in The Edge Financial Daily, on January 20, 2017.

KUALA LUMPUR: Ekovest Bhd said its construction order book had increased to about RM13 billion with the inclusion of the Duta-Ulu Kelang Expressway (DUKE) Phase 2A highway project it announced this week.

“These projects will keep us busy for five years,” Ekovest managing director Datuk Seri Lim Keng Cheng told reporters after the group’s extraordinary general meeting (EGM) yesterday.

On Tuesday, Ekovest received approval in principle to undertake DUKE Phase 2, which complements the existing DUKE and the under-construction DUKE Phase 2 highways to provide seamless travelling in and out of Greater Kuala Lumpur.

At the EGM yesterday, Ekovest shareholders unanimously approved the group’s proposed share split and its disposal of a 40% equity interest held in Konsortium Lebuhraya Utara-Timur (KL) Sdn Bhd (Kesturi) — which is the concession holder of DUKE — to the Employees Provident Fund (EPF).

The share split involves the subdivision of every two existing shares of 50 each into five ordinary shares of 20 sen each. Following the disposal, a special dividend of 25 sen per share will be distributed to shareholders, indicating a dividend yield of about 9.73% based on its closing price yesterday.

The remainder of the proceeds will be used for repayment of borrowings, exit payment, working capital and expenses for the corporate exercise.

Lim said its proposed disposal of a 40% stake in Kesturi is in line with the company’s broad strategy to “monetise its matured infrastructure assets to free up financial resources for the infrastructure division expansion and other core businesses, such as construction and property development”.

Upon the completion of the corporate exercises, the net gearing of Ekovest will improve from 1.21 times to 0.38 times.

Lim added that the long-term relationship with the EPF established through this corporate exercise could be a platform to pursue collaborations on potential investments in the future.

Lim said the upcoming year will see Ekovest focusing on the construction business, although two property launches, namely EkoTitiwangsa and EkoCheras, are also scheduled to take place.

Ekovest’s share price fell 0.77% or two sen to RM2.58 yesterday, giving the group a market capitalisation of RM2.22 billion.

Source: http://www.theedgemarkets.com/my/article/ekovest-construction-order-book-rises-rm13b