Zelan Shifts Focus To Jobs In Malaysia

Zelan Shifts Focus To Jobs In Malaysia
Business Times 

Zelan Bhd , faced with cost overruns in overseas projects, has shifted its focus to local jobs with concessions such as the Gombak Integrated Transport Terminal (GITT), director Datuk Hasni Harun said.

"We've learnt our lessons concerning overseas projects. So it is better to focus on local jobs," Hasni said.

The GITT project has a 25-year concession with an income stream close to RM900 million, he told reporters after the company's extraordinary general meeting (EGM) in Kuala Lumpur yesterday.

Zelan reportedly suffered contract losses amounting to RM199.4 million, including RM93.4 million in Saudi Arabia, RM12.2 million in the United Arab Emirates and RM93.8 million in Indonesia.

It also had an impairment loss of RM44.4 million from goodwill for the engineering and construction division.

Zelan's Middle East projects included the Shuaibah III and Shuqaiq II water desalination and power plants in Saudi Arabia, Sidar Tower in Dubai, Meena Tower and Al-Reem Island in Abu Dhabi, the UAE.

It also has a joint venture with PT Primanaya Djan International to build coal-fired power plants in Indonesia for PT Perusahaan Listrik Negara.

At the EGM, shareholders approved the proposal to sell Zelan's 30 million IJM Corp Bhd shares within 12 months.

Zelan has a 7.12 per cent stake in IJM, which will be reduced to slightly above 5 per cent after the sale.

Assuming that it is able to sell the IJM shares at an average of RM5.08 each, the company will recoup RM152.4 million.

From the amount, it plans to use RM50 million to repay debts and the remainder for working capital.

Recently Energy, Green Technology and Water Minister Datuk Seri Peter Chin said the government will soon call for bids to upgrade three power plants in Peninsular Malaysia.

Asked if this spells opportunity for Zelan, Hasni, who is also the group managing director of MMC Corp Bhd, said: "MMC will consider Zelan as one of the contractors but pricing-wise, it will still be competitive because of related-party transactions."