Chan to inject contracts into Harvest Court

KUALA LUMPUR: Young businessman Datuk Raymond Chan plans to offer construction contracts to Harvest Court Industries Bhd (HCIB) and help turn around the loss-making company.


The 39-year-old told Business Times in an interview yesterday that his privately-held company,Sagajuta (Sabah) Sdn Bhd, now has close to RM1.2 billion worth of construction contracts.

The move, if approved by HCIB’s shareholders,
will make the company profitable again within a year.

Chan was clarifying earlier reports that he was injecting assets into HCIB. He said his plans were only to “inject contracts to spruce up revenue”.

The deals will be awarded in phases and the first that has been offered to HCIB is valued at RM129 million.

It involves building a 950-unit condominium block called 1 Sulaiman Gold Tower in Kota Kinabalu.

He also wants to award a RM70 million EPC (engineering,
procurement, construction and commissioning) contract
to HCIB to set up a pulp and paper plant in Negri Sembilan.

The plant, owned by Chan’s 1Green Enviro Sdn Bhd, will convert biomass into paper.

Chan, who is a substantial shareholder in HCIB with a 13.85 per cent stake, said his proposals will be tabled out soon by the HCIB board.

So far the board has been quite receptive.

“We still have to wait to see if the shareholders are keen to look at construction as part of HCIB’s revenue earner and once they give their nod, we will explore all angles and decide which of Sagajuta’s contracts we will award to HCIB.”

Chan said if all goes well, the construction jobs will provide HCIB with a healthy margin of over 10 per cent, “and this will definitely help revive the company within one year”.

Half of Sagajuta’s contracts are in Sabah and the rest is in the Peninsula.

“Moving forward, there is a lot of upside potential for HCIB.
That is why I am keen on reviving it. The company has all the fundamentals, almost debt-free and no bank borrowings.”

He said he is working closely with HCIB managing
director Ng Swee Kiat to explore how best to raise capital for the company.

This includes a rights issue or share placement.

He will also assign a good team to help manage HCIB's new construction business.

"We will not be managing the company. We just want to assist the current board," he said.

Chan first rose to prominence after cash-rich Sagajuta was linked to a reverse takeover of Jerneh Asia Bhd, which is 37 per cent-owned by Robert Kuok. The talks in the end fell through due to a disagreement over definitive terms.

HCIB posted a net loss of RM2.7 million on revenues of RM6.4 million in fiscal 2010. For the first half of 2011, its net loss was RM678,000 on a turnover of RM6.1 million.