Vivocom terminates RM240.42 mil contract from Coneff

KUALA LUMPUR (June 9): Vivocom International Holdings Bhd said today it has terminated a RM240.42 million contract awarded to it by Coneff Corp Sdn Bhd due to non-fulfilments of certain contractual obligations.

In a filing with Bursa Malaysia today, Vivocom said its board of directors was of the opinion that the non-fulfilment of the contractual obligations had made it difficult for its subsidiary Vivocom Enterprise Sdn Bhd (VESB) to complete the project and hence, it was in the best interest of the group to terminate the contract.

It added that a notice has been sent to Coneff on the termination of the contract.

"The termination of the contract is not expected to materially affect the earnings and net assets of the group as it has concurrent on-going projects, and is confident of securing additional new projects in the foreseeable future in view of the fact that the group has a rich pipeline of several sizable projects currently under bid," said Vivocom.

Under the contract, VESB was to undertake construction works for two blocks of commercial towers comprising service apartments, two storeys of retail units, one storey of recreational centre and seven storeys of car parks for Phase 3B of the Desa Tasik project in Sungai Besi here. The project was to have commenced on March 8, 2016, with completion within 45 months.

VESB had accepted the letter of award from Coneff on Jan 20, 2016. Coneff is wholly-owned by Bina Bersatu Sdn Bhd, which in turn is 70% owned by Zamurni Sdn Bhd.

Coneff was formed to undertake developments projects, namely the Desa Tasik Project with Dewan Bandaraya Kuala Lumpur since 1989 to develop the area.

Vivocom shares closed down 0.5 sen or 4% at 12 sen today, with 36.92 million shares done, for a market capitalisation of RM388.1 million. — theedgemarkets.com

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