KUALA LUMPUR, 14 JULY: Kejuruteraan Asastera Bhd (KAB), a provider of electrical and mechanical engineering services, is teaming up with LCS Holdings Inc and ATS Venture Group Sdn Bhd of the Philippines to develop and operate a communications tower project in the Philippines. According to a statement to Bursa Malaysia, KAB has signed a tripartite memorandum of understanding (MoU) with LCS and ATS.
“This Memorandum of Understanding confirms LCS’ commitment to work with KAB on a turnkey solution to build and run a telecommunication tower project in the Philippines, a contract that LCS has acquired.”
KAB will take the lead on the financial arrangements, while ATS will serve as the project’s key technical partner.
“Among other things, LCS’ responsibilities include local site sourcing and purchase, as well as communicating with end customers and relevant Philippine authorities,” KAB explained.
According to the organization, KAB and ATS will be the chosen suppliers for related product procurements for this project.
According to the Bursa release, KAB, LCS, and ATS have vast experience in steel fabrication, supply, construction, and erecting steel telecommunication towers, offering significant benefits to the project.
The telecommunication towers will be leased for 15 years to Dito Telecommunity Corp in the Philippines, which is co-owned by China state-owned China Telecommunications Corp, the parent company of China Telecom, after the project is completed, according to KAB.
KAB stated it will be able to increase its recurring income with the long-term concession inked with Dito for the next 25 years, which has an option to extend for another ten years.
“This new revenue stream, which would benefit KAB, is estimated to generate RM15 million in revenue with a profit of around RM3 million each year,” KAB noted.
KAB managing director Datuk Lai Keng Onn said the company’s foray into the telecommunications market will help the company maintain a steady stream of recurring revenue in addition to its existing operations.
“This agreement provides KAB with a fantastic opportunity to continue extending its reach in Southeast Asia.” In the future, we want to invest in and construct 300 communications towers, each measuring 45 meters in height.
“I am excited to work with LCS to build on this new long-term strategic partnership to support the Philippines’ telecommunications industry, which has grown tremendously over the years, with many Filipinos’ continued appetite for communicating via mobile phones, accessing information via the internet, and streaming and downloading videos,” he added.
KAB climbed seven sen, or 8.48 percent, to 89.5 sen at the lunch break, with 62.6 million shares changing hands. This puts the company’s worth at RM1.51 billion./n
