Harvest Court to diversify into construction business

PETALING JAYA: Harvest Court Industries Bhd, via its wholly-owned subsidiary, Harvest Court Development Sdn Bhd (HCDSB),
is proposing to diversify its existing business of manufacturing and
marketing of timber doors and other related products into the
construction business.
In a note to Bursa Malaysia, TA Securities Holdings Bhd,
its adviser, said on behalf of the company that the exercise would
require shareholders’ approval in a general meeting that might result in
the diversion of 25% or more of its net assets to an operation that
differs widely from that previously carried out by Harvest Court.
It also said the proposed diversification could result in a contribution of 25% or more of its net profits.
The exercise comes following a non-binding related party transactions (RPTs) last month with 1Green Enviro Sdn Bhd for the construction of a pulp and paper plant in Negri Sembilan worth RM70mil to process oil palm empty fruit bunches and Sagajuta Sdn Bhd for the design and construction of a proposed mixed development in Sabah worth RM129mil.
TA Securities said the rationale for HCDSB to enter into the RPTs was to take advantage of new business opportunities.
“The
RPTs will enable Harvest Court to meet its business needs and are
expected to generate profitability to the group. These would ultimately
benefit the group and the shareholders by enhancing profitability and
returns on shareholders’ funds.”
On the prospects of the
construction industry, it said the sector had expanded 2.1% during the
first half of 2011, led by the recovery in residential construction as
well as increased activity in the non-residential sub-sectors.
“Growth
of the construction sector is expected to be supported by the
acceleration of the 10th Malaysia Plan projects in the second half of
2011. The sector is thus expected to grow 3.4% in 2011,” it said.