KUALA LUMPUR (Aug 7): Kawan Renergy Bhd’s (KL:KENERGY) wholly-owned subsidiary, Kawan Engineering Sdn Bhd (KESB), has entered into a contractor agreement with KAB Energy Holdings Sdn Bhd for a project worth RM58 million.

In a filing with Bursa Malaysia, Kawan Renergy said KAB Energy has appointed KESB for the provision of mechanical and firefighting works as well as electrical works for a 52-megawatt power plant and its associated facilities in Sipitang, Sabah.

It said KESB shall within 20 days from the receipt of the letter of award dated April 8, 2024, furnish a performance bond of 5% of the subscontract sum and a corporate guarantee in favour of KAB Energy.

“The rationale for the proposed provision of the corporate guarantee by Kawan Renergy to KESB is to ensure that KESB shall perform all its obligation under the subcontract,” Kawan Renergy said.

The company added that the subcontract is expected to contribute positively to the group’s future earnings and net assets as any profit attributable to the group would be realised in stages during the tenure and progress of the subcontract.

“The subcontract will have no effect on the issued share capital and substantial shareholdings of the company,” it added.

The works will commence on April 8, 2024 and is scheduled for completion in the first quarter of 2026.

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