Serba Dinamik wins RM7.71bil UAE project

PETALING JAYA (The Star Online) : At a time when nearly half of the world’s population is living under some form of lockdown and companies are fighting for survival, Serba Dinamik Holdings Bhd announced it has bagged a construction project worth in billions of ringgits in the United Arab Emirates (UAE).

In a filing with Bursa Malaysia, Serba Dinamik said it has bagged a contract worth US$1.78bil (RM7.71bil) for engineering, procurement, and construction of an innovation hub, academic campus, related facilities and information technology (IT) infrastructure in Abu Dhabi.

Notably, Serba Dinamik is known for its business in the oil and gas sector including oil field maintenance and engineering as well as the construction of oil rigs.

The company is also in the business of building small power plants.

The terms of Serba Dinamik’s contract seems to be a difficult task. In the statement, Serba Dinamik said the construction project in Abu Dhabi is expected to be completed in four years.

Should they miss the deadline, the company has to pay 10% of the contract price as a penalty.

“The company shall be liable for damages in the event of its failure to comply with the time for completion with a maximum amount of 10% of the contract price, ” Serba Dinamik said.

This could pose risk to the company should the movement control order (MCO) prolong.

“A lot of technical and major projects may have to go beyond their deadlines as lockdown in Malaysia and other countries have restricted the movement of manpower and equipment, halting traveling activities and disrupting the supply chain, ” said an analyst.

In addition, the arbitration of Serba Dinamik’s contract must be in accordance with the laws, rules, and regulations of the Emirate of Abu Dhabi and the federal laws of the UAE.

Serba Dinamik said the award would not have any effect on the issued share capital and the shareholdings of the substantial shareholders of the company.

“The award is expected to contribute positively to the net assets, consolidated earnings and earnings per share of the company for the financial year ending Dec 31,2020, ” it said.

Aside from Abu Dhabi, Serba Dinamik has a footprint in other countries in the Middle East, namely, Saudi Arabia, Oman, Bahrain and Qatar.

Its Middle East operations contributed about 61% of the company’s revenue in the financial year ended Dec 31,2018 (FY18), mainly in the oil and gas sector.

Shares in Serba Dinamik soared more than 10% in a day, after the company announced the project win.

The stock closed 9% higher to RM1.68 yesterday. The project could also mark the company’s first foray into property development.