PETALING JAYA: ETA Group Bhd, through wholly-owned subsidiary ETA Design & Build Sdn Bhd (ETA D&B), has entered into recurrent related party transactions (RRPT), comprising three construction agreements amounting to RM66.69mil as well as three subcontract agreements worth an aggregate subcontract value of RM63.51mil.
In a filing with Bursa Malaysia, ETA Group announced that the three design and build construction agreements were signed with ETA Industries Sdn Bhd (ETAI), and three subcontract agreements with ETA World Sdn Bhd (ETAW).
The aggregate actual value of RRPTs, totalling RM130.2mil, has exceeded the estimated value stated in its circular to shareholders by 86%, the group disclosed.
“The excess is attributable to the contracts, which were procured by ETAI as developer after the issuance of the circular and awarded as a single tranche covering three projects,” it said.
The contracts are for the design and build of three industrial projects on freehold land in Mukim Kapar, Daerah Klang, Selangor Darul Ehsan, comprising factories, warehouses and ancillary office accommodation, as well as refuse chambers, substations and guard houses.
The scope of the works involves the design, engineering, procurement and construction of the projects, including 14 single-storey semi-detached factories with offices, two TNB compact substations, a TNB double chamber substation, and four single-storey semi-detached factories with a single-storey warehouse and offices.
The group expects the works to be completed within 24 months from the date of building plan approval for each project, subject to any extension of time granted under the contracts, it added.
As the group’s dedicated design and build vehicle for the property and construction segment, ETA D&B expects an aggregate gross margin of RM3.18mil generated from the contracts over the duration of the works, without tender cost or bid risk.
“The contracts will also allow ETA D&B, as a recently incorporated contractor, to establish a track record in the design and build of industrial properties, which is necessary for it to tender for contracts from unrelated third parties and to obtain bonding facilities on competitive terms,” it said.
