NWP eyes housing projects with RM745mil GDV

NWP Holdings Berhad CEO Dato Sri Nelson Kee Soon and M2B World Director Rosli Ismail Signing ceremony

KUALA LUMPUR: Timber product manufacturer NWP Holdings Bhd has inked a turnkey construction heads of agreement (TCA) to undertake six affordable housing projects under Syarikat Perumahan Negara Bhd (SPNB) and Perbadanan PR1MA Malaysia, with an estimated gross development value (GDV) of RM745mil.
 
NWP told Bursa Malaysia on Wednesday that the diversification into construction, through this TCA signed with M2B World (M) Sdn Bhd, would provide an alternative income source.

It pointed out that it and its subsidiary companies had been posting loss after taxation since financial year ended 2006.

M2B World had secured the contracts -- comprising projects in Selangor (Ampang), Sabah (Sandakan), Pahang (Pekan) and Kelantan (Kota Baru, Ketereh and Kuala Krai) -- from SPNB and PR1MA about four months ago.

M2B World agrees to award the construction of the projects to NWP subject to the parties entering into a definitive agreement within three months  or any further extended period as the Parties may mutually agree

NWP said its unit NWP Builder Sdn Bhd, currently dormant, was in the midst of applying as a Class G7 contractor with the Construction Industry Development Board which would allow it to tender for Government and private sector projects of any size and value.

NWP, which has a paid-up capital of RM80mil and market capitalisation of RM123.2mil (on Wednesday), plans to finance the projects through various equity fund raising exercises and/or debt financing.

“The exact mix of equity fund raised and/or debt financing will be determined by the board at a later date after taking into consideration the gearing level, dilution to earnings per share, interest costs as well as internal cash requirements of the group,” it said.

Last month it proposed to increase its authorised capital to RM500mil from RM100mil as well as to issue shares representing of up to 15% of its paid-up capital to expand its working capital.

At the TCA signing ceremony on Wednesday, M2B chief executive officer Datuk Seri Sunny Ung Eng Huat told reporters that works on the first three projects would start within six months with targeted completion in four years.

NWP shares added 3.5 sen to close at 38.5 sen on Wednesday, with 25.32 million shares changing hands.