KUALA LUMPUR (Oct 24): Construction outfit SC Estate Builder Bhd (KL:SCBUILD) said the termination of a contract worth RM4.3 million to build affordable houses with solar power on the roofs by Merchant Esteem Sdn Bhd (MESB) was due to a decision by MESB's new management, which has acknowledged that ongoing uncertainties in the commercial property market and low demand would impact the construction and sales of shophouses.

To recap, SC Estate Builder's wholly owned subsidiary SC Estate IBS Sdn Bhd (SEISB) had received a letter of award in January 2021 from MESB for the proposed prototyping solar power on the roof of one shophouse unit, and the proposed construction of 28 units of single-storey shophouses in Alor Setar, Kedah.

In a filing with Bursa Malaysia on Thursday, SC Estate Builder said SEISB had received a letter of termination from MESB, in which the latter stated that it has been under a new management since Sept 5 this year.

"The percentage of completion of the contract to date is 20%. There is no payment due to SC Estate Builder by MESB," it added.

The mutual termination of the contract is not expected to have a material impact on SC Estate Builder's earnings and net assets for the financial year ending July 31, 2025.

SC Estate Builder shares closed unchanged at one sen on Thursday, giving the company a market capitalisation of RM40.9 million. The stock has fallen 50% so far this year.