PRG mulls JV with Singapore O&G firm for property, construction jobs

KUALA LUMPUR (July 6): PRG Holdings Bhd is going to explore the possibility of partnering with Singapore-listed oil and gas (O&G) firm Mirach Energy Ltd to undertake property and construction projects in Malaysia and elsewhere.

It said this yesterday after inking a memorandum of understanding (MoU) with Mirach that will set the stage for formal negotiations and information sharing with regard to the proposed joint venture (JV).

PRG, formerly known as Furniweb Industrial Products Bhd, said the pact with the loss-making Mirach, an upstream O&G player, is in line with its business model to rope in strategic partners for projects that fit its strategies and business capabilities.

“The proposed joint venture will also provide a good opportunity to diversify the revenue stream of the company,” PRG said in a filing with Bursa Malaysia.

Together with Mirach, PRG said it will establish a JV company (JVCo) that will carry out the main contractor work, with the shareholding ratio to be determined later.

In a separate filing with Singapore Exchange, Mirach said the proposed tie-up with PRG is its first strategy to return to profitability.

“The board believes the financial performance and position of the company will be strengthened by the proposed JVCo, thus creating shareholder value as well as increasing market capitalisation of the company,” Mirach said in a separate filing with the Singapore bourse.

For a start, PRG said it will appoint the JVCo to undertake the main contractor work for an affordable housing development in Peninsular Malaysia, but did not give specifics.

“PRG will also assist the JVCo to obtain bank facilities as working capital for the first project,” PRG said, adding that it will also assist the JVCo to obtain all regulatory licences and permits to undertake the affordable housing development.

PRG announced in mid-June it had inked a RM5 billion MoU with Syarikat Perumahan Negara Bhd to develop affordable homes. Under the MoU, PRG will undertake construction works and project financing for the projects
identified.

Shares in PRG closed unchanged at RM1.01 yesterday, with a market capitalisation of RM301.42 million.

This article first appeared in The Edge Financial Daily, on July 6, 2017.

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