ZELAN TO RECEIVE RM104.7M FROM MEENA HOLDINGS THIS WEEK
ZELAN TO RECEIVE RM104.7M FROM MEENA HOLDINGS THIS WEEK
The Edge Financial Daily
Home Business, 2nd September 2014
KUALA LUMPUR: Zelan Bhd is set to receive the 121.64 million dirhams (RM104.7 million) owed by Meena Holdings LLC this week, after two rounds of delay, according to sources. The money was part of a supplementary agreement the two entities had signed to allow Zelan to complete the Meena Plaza, mixed use development in Abu Dhabi, which was halted after Meena abruptly terminated Zelan contract in November 2012.
"Only after Zelan receives the money will it be able to continue the project," a source told The Edge Financial Daily. The source said Zelan will use the money as working capital, with a small sum set aside to settle some shortterm borrowings.
"The amount might be small,but it will allow Zelan to kickstart — or rather complete - the project. There is 515.49 million dirham worth of works that are still incomplete," the source added.
About 92.53 million dirham out of the sum owed by Meena Holdings is for the performance bond that was liquidated after Meena Holdings terminated the contract. The remainder is for the payment of outstanding progress claims. In April, Zelan said that its wholly owned subsidiary Zelan Holdings (M) Sdn Bhd had reached a second supplementary agreement with Meena Holdings to resolve all its disputes from the contract termination about two years a go. Initially, Meena Holdings was supposed to reimburse Zelan for the performance bond and outstanding claims 74 days after the supplementary agreement was signed, with construction work on Meena Plaza slated to begin 30 days upon receiving the payment. However, in June, Meena Holdings requested for a 30 day extension to settle the payment. It then asked for another round of extension in July.
At Zelan annual general meeting last Friday, the group newly minted managing director Adnan Mohammad told reporters that Zelan is looking forward to a more positive year for its financial year ending Dec 31,2014 (FY14).
"Looking at our 1QFY14 results, I think things are starting to turn around for Zelan. Looking at the amount of contracts that we have won and the completion of the second supplementary agreement [with Meena Holdings], these are positive signs for Zelan," he said.
"We should recommence our work [for Meena Holdings] soon and start work on the local projects we had secured recently." Zelan order book presently stands at RM1.2 billion, which will last the group for some 31 months, said Adnan. Zelan had also bid for more jobs at Petroliam Nasional Bhd (Petronas) refinery and petroche mical integrated development (Rapid) coplex in Pengerang, Johor, said Adnan. However, he declined to reveal the jobs and the tender book figure.
"Our expertise lies in marine engineering. There are many other engineering and construction jobs in Rapid and we have put in [our] bids. We have to just wait for the results to see how it goes," he said.
When asked about Zelan chances of winning those bids, Adnan said while it is still too early to say anything, having landed a contract earlier for the construction of a jetty at Rapid showed the group has the confidence and capacity to handle largescale projects.
"We won a RM250 million project earlier [from Petronas], It is a sizeable one and we won it via a tender process. That says something about us," he said. Apart from the Petronas job it won recently, Zelan has also been awarded a job by the East Coast Economic Region Development Council to build a drawbridge in Kuala Terengganu. It will undertake the project via a 50:50 joint venture with Hasrat Sedaya Sdn Bhd.