KUALA LUMPUR (July 21): Kejuruteraan Asastera Bhd (KAB) announced today that its wholly-owned subsidiary KAB Technologies Sdn Bhd (KABT) has entered into a binding term sheet with Vodex Technical Services Sdn Bhd to expand its mechanical work division.
In a statement, KAB said that under the binding term sheet, a special purpose vehicle named TVT Link Tech Solutions Sdn Bhd was formed.
“KABT holds a 60% stake in TVT Link and the remaining 40% is held by Vodex. The employees and all existing operations and maintenance (O&M) contracts will be novated to TVT Link.
“These O&M contracts are expected to provide an estimated 10% additional contribution to the group’s bottom line,” added KAB, an electrical and mechanical engineering services provider.
KAB managing director Datuk Lai Keng Onn said: “KAB has been actively involved mainly in the electrical scope of work and today, I am very excited with the opportunity to partner Vodex as it will further enhance our mechanical engineering and operations and maintenance services segments.”
“When we made our debut on the ACE Market of Bursa Malaysia Securities Bhd in 2017, part of KAB’s strategies was to expand into these business segments. Therefore, through this partnership, we are confident that we will be able to expedite our growth plans and at the same time, complement our expansion in the O&M services.
“Given Vodex’s track record, we are able to leverage on its outstanding expertise and in-depth experience to offer comprehensive mechanical engineering services to our customers.
“I believe this partnership marks the beginning of a long-term win-win relationship with Vodex and will bring about new growth opportunities by integrating the capabilities and resources of both parties to maximise synergy,” he added.
Separately, KAB noted it has been listed as one of the constituents of the FTSE Bursa Malaysia EMAS Index (FBM EMAS Index), which comprises the FTSE Bursa Malaysia Top 100 Index and FTSE Bursa Malaysia Small Cap Index.
“Being a constituent of the FBM EMAS Index, the group will be provided with an environmental, social and governance (ESG) rating in accordance with globally accepted FTSE4Good Methodology and Rating Model,” it said.
At the time of writing, KAB’s share price was up half a sen to 88.5 sen, giving the group a market capitalisation of about RM1.5 billion.