KUALA LUMPUR (May 7): Lafarge Malaysia Bhd has resumed supplying cement to all eight packages of work for the East Coast Rail Link (ECRL) project, said the cement manufacturer in its filing with Bursa Malaysia this evening.
The supply of cement is under the RM270 million contract that Lafarge had secured from China Communications Construction (ECRL) Sdn Bhd for the construction of the rail link project, which was suspended last year after the change of Government and was revived on April 12.
In the filing, Lafarge said it had received a letter from China Communications Construction (ECRL) Sdn Bhd yesterday (May 6) to cease the suspension of supply of cement to them with immediate effect.
The letter was issued after Lafarge’s client China Communications Construction (ECRL) received instruction from Malaysia Rail Link Sdn Bhd on April 15 on lifting the suspension of the cement supply contract.
“The company (Lafarge) is instructed to resume supplies for the remaining term under the contract until Dec 31, 2019,” said the filing.
The contract was to expire on Dec 31, 2019, with the option for the parties to renew the contract for a further two years.
The good news comes hard on the heels of YTL Cement Bhd having bought a 51% stake in Lafarge for RM1.63 billion, or RM3.75 per share. YTL Cement has launched mandatory general offer to buy out the remaining shares from minority shareholders.
Lafarge share price was unchanged at RM3.72 today with some 4.93 million shares changing hands, valuing it with a market capitalisation of RM3.16 billion.
Year-to-date, the counter has jumped 105.52% from RM1.81. The strong share price rally was fueled by the positive news on the revival of the ECRL project. The takeover offer from YTL Corp Bhd’s 98%-owned unit YTL Cement helped to add fuel to the rally.