Hot Stock Zelan jumps 10% on possible revival of RM805.4m Meena Plaza job

by **Cals** Mon 18 Nov 2013, 15:44

Hot Stock Zelan jumps 10% on possible revival of RM805.4m Meena Plaza job

Business & Markets 2013

Written by Jeffrey Tan of theedgemalaysia.com

Monday, 18 November 2013 15:17

KUALA LUMPUR (Nov 18): Zelan Bhd jumped as much as 10% in share price after The Edge today reported the firm is in the midst of reaching a settlement with Meena Holdings LLC to return as the main contractor for the RM805.4 million Meena Plaza job.
At 3.05 pm today, Zelan rose 2 sen or 6.7% to trade higher at 32 sen. The sixth most active counter saw heavy trades of some 14 million shares.
The Edge said in an interview with Zelan managing director Datuk Mohd Nor Idrus, the construction outfit is currently negotiating with Meena Holdings to upend the previous contract termination last November.
In November last year, Meena Holdings terminated its contract with Zelan Holdings (M) Sdn Bhd, a wholly owned unit of Zelan, and liquidated the performance bond, effectively ousting Zelan from the picture.
“Barring no hiccups in our negotiations, we are targeting to reach a mutual settlement [with Meena Holdings] by the end of this year,” said Mohd Nor.
He said Zelan’s team could be back on the construction site as early as a month after they officially agree on the new deal.
“Once we sign the supplementary agreement for the mutual settlement, the performance bond will be returned to us and both parties [Meena Holdings and Zelan] will agree not to proceed with the arbitration,” he said.
The possible settlement is a U-turn of sorts, as Zelan had in August reiterated its intention to seek arbitration to recover from Meena Holdings an outstanding sum of AED175.7 million (RM152.5 million).
This includes the performance bond drawn down of AED92.5 million (RM80.3 million), it said.
In Sept, 2007, Zelan Holdings was awarded the contract for the main construction package for Meena Plaza, valued at AED903.7 million (RM784.6 million), which was then revised to AED925.3 million (RM805.4 million).
Zelan had via the Zelan Holdings-Al-Ambia joint venture given 30 months to complete the construction of Meena Plaza from 2007/2008.
However, due to various reasons, only 41.77% of the project was completed as at Nov 22 last year.