KUALA LUMPUR (July 11): Sarawak Consolidated Industries Bhd (SCIB) has signed a Memorandum of Understanding (MOU) with IRIX Sdn Bhd that will pave the way for SCIB to acquire a 30% stake in IRIX SEA H2X Sdn Bhd, pending satisfactory due diligence.

SCIB announced on Tuesday (July 11) that through its MOU with IRIX, the company would participate in the SEA-H2X project by investing in IRIX SEA H2X, which is part of the consortium responsible for constructing and operating the Southeast Asia Hainan-Hong Kong express cable system.

It said upon fulfillment of the MOU's conditions precedent, SCIB is to subscribe up to 30% of IRIX SEA H2X’s issued capital and pay a deposit sum of RM2 million for the transaction. The transaction, it added, would be conditional upon satisfactory due diligence conducted by SCIB. Subsequently, the parties shall execute a share subscription agreement in respect of the proposed transaction.

SCIB added the estimated value of the company’s involvement in the project is RM250 million, saying the venture offers substantial financial rewards and the promise of exciting growth opportunities for SCIB.

The SEA-H2X is a new submarine cable system connecting Hong Kong SAR China, Hainan China, Philippines, Thailand, East Malaysia and Singapore, with options to extend to Vietnam, Cambodia, West Malaysia and Indonesia.

Estimated to be approximately 5,000km in length, it will provide high-speed and low-latency data connections for customers within the Regional Comprehensive Economic Partnership region, in preparation for the impending 5G era.

“The selection of SCIB as a strategic collaborator for this significant project underscores our strong capabilities and robust reputation in the industrialised building system sector,” said managing director of SCIB Ku Chong Hong in a separate statement.

To date, SCIB’s order book stands at a cumulative contract value of RM365.99 million.

SCIB shares gained 2.5 sen or 5.43% to 48.5 sen on Tuesday, valuing the group at RM307.21 million.