Zecon secures RM852 mil banking facilities from Bank Pembangunan

TheEdge Fri, Feb 09, 2024 06:53pm - 2 months View Original


KUALA LUMPUR (Feb 9): Zecon Bhd, which provides civil engineering and building construction services, has secured Tawarruq Asset Financing Facilities totalling RM851.94 million from Bank Pembangunan Malaysia Bhd.

Zecon Medicare Sdn Bhd (ZMSB) accepted a banking facility of RM616.94 million, with RM482 million designated for settling an existing structured Islamic term financing facility provided by MBSB Bank Bhd to ZMSB.

The remaining RM134.94 million will be allocated for payment to contractors for escalation costs incurred in the children’s specialist hospital project, as well as for working capital.

Meanwhile, ServeCo Sdn Bhd received a banking facility of RM235 million, earmarked for full settlement of the group’s existing facilities with the respective financial institutions and for working capital.

According to Zecon's 2022 annual report, ZMSB is 51% owned by the group, while ServeCo is a wholly owned subsidiary of Zecon Capital Sdn Bhd.

In a bourse filing on Friday, Zecon said both banking facilities have a tenure of up to 20 years from the date of first drawdown of the banking facilities.

In addition, the banking facilities have no significant impact on the group’s net assets or earnings per share and will result in marginal increase in Zecon’s gearing ratio.

As at end-September 2023, Zecon had RM720.18 million short-term loans against cash and bank balances of RM31.35 million. As of the financial year ended Dec 31, 2022, Zecon’s gearing was 3.24 times.

Shares of Zecon closed 2.5 sen or 6.7% higher at 43 sen on Friday, giving the Main Market-listed group a market capitalisation of RM63.38 million.

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