ICSB, China companies join to undertake KUTS project

KUCHING: Ibraco Construction Sdn Bhd (ICSB) has inked a joint venture cum shareholders’ agreement with two China-based companies to undertake the Kuching Urban Transport System (KUTS) project that they have jointly secured recently.

The wholly-owned subsidiary of Ibraco Bhd has entered into the agreement with China Railway Engineering Corporation (M) Sdn Bhd (CRECM) and Nanyang Tunnel Engineering Sdn Bhd (NYTE) to form a joint venture company to implement the project. ICSB will own 51 per cent equity interest in the joint venture company while CRECM 39 per cent and NTYE 10 per cent, Ibraco said in a filing with Bursa Malaysia.

ICSB is principally involved in construction and civil engineering works while CRECM (a whollyowned subsidiary of China Railway Group Ltd) is involved in infrastructure and construction works.

NYTE (a wholly-owned subsidiary of CRECM) is engaged in the construction of tunnels and other works related to conveniences of public utility and its related services. ICSB, in partnership with CRECM and NYTE, was awarded the contract for the project worth RM568.6 million last month.

The project involves the construction and completion of infrastructure works for KUTS Blue Line-package 1 from Rembus in Samarahan Division to Stutong here.

The project, according to Ibraco, is expected to be completed by Dec 31, 2025 for Stage 1 and June 30, 2026 for Stage 1A.

On the joint venture company, Ibraco said the parties agreed that the initial issued and paid-up capital shall be RM2 million via issuance of 2 million ordinary shares at an issue price of RM1 each in proportion of their shareholding structure.

Thereafter, its share capital may be increased upon such terms and at such time as the board of directors shall decide and shall be borne by the parties based on the shareholding accordingly.

The board of directors of the joint venture company shall comprise five directors — three to be appointed by ICSB and one director each by CRECM and NYTE.

“Subject to the requirements of the Companies Act, 2016, the cash flow requirements of the company and its operational and capital expenditure requirements, the board may authorise a distribution of dividend to the parties at such time and in such manner as the board consider appropriate,” it added. None of the parties shall sell or transfer or deal with their shares in the joint venture company.