MEMORANDUM OF UNDERSTANDING MEMORANDUM OF UNDERSTANDING BETWEEN JOHOR PORT BERHAD ("JPB"), A WHOLLY-OWNED SUBSIDIARY OF MMC CORPORATION BERHAD ("MMC") AND FWQ ENTERPRISES (PRIVATE) LIMITED, A 65%-SUBSIDIARY OF FELDA HOLDINGS BHD ("FHB") WHICH IN TURN IS A WHOLLY-OWNED SUBSIDIARY OF FGV HOLDINGS BERHAD ("FWQ") ("MOU")

MMC CORPORATION BERHAD

Type Announcement
Subject MEMORANDUM OF UNDERSTANDING
Description
MEMORANDUM OF UNDERSTANDING BETWEEN JOHOR PORT BERHAD ("JPB"), A WHOLLY-OWNED SUBSIDIARY OF MMC CORPORATION BERHAD ("MMC") AND FWQ ENTERPRISES (PRIVATE) LIMITED, A 65%-SUBSIDIARY OF FELDA HOLDINGS BHD ("FHB") WHICH IN TURN IS A WHOLLY-OWNED SUBSIDIARY OF FGV HOLDINGS BERHAD ("FWQ") ("MOU")

1.       INTRODUCTION

MMC wishes to announce that JPB has entered into the MOU with FWQ on 3 January 2020 to explore the potential equity participation of up to 25% equity interest in Fauji Akbar Portia Marine Terminals Limited (“FAP”), an entity which had been granted a concession by the Port Qasim Authority (“Concession”) to operate a dry bulk terminal located in Port Qasim, in the Islamic Republic of Pakistan (“Pakistan”).

2.       BACKGROUND

On 5 July 2019, FAP had, via its Teaser Document & Guidelines for submitting Expression of Interest (“EOI”) (“Teaser Document”) invited selected potential investors to invest up to 25% equity interest in FAP for the future expansion and upgradation works identified by FAP for its Concession (“Project”).  JPB and FWQ (collectively the “Members”) intend to form an unincorporated joint venture (“Consortium”) for the sole purpose of, preparation and submission of an EOI to FAP and/or FF (as defined in Section 5 below) as set out under the Teaser Document.

The Project will consist of five potential expansion/upgradation works identified by FAP for its Concession which are expected to increase throughputs, efficiency, capacity and revenue of FAP, namely:

(i) land reclamation for additional storage;

(ii) installation of new and efficient unloaders;

(iii) warehouse extension along with additional bagging lines;

(iv) installation of new silos; and

(v) jetty extension.

3.       SALIENT TERMS OF THE MOU

The salient terms of the MOU are as set out below:

(i) the Members are desirous to work together to make available their technical and commercial expertise and to collaborate and utilise their respective resources, capabilities and prudent experiences, as well as to act in good faith, and do such things as may be necessary or expedient in relation to the preparation and the submission of the EOI;

(ii) the Members are committed to submit the EOI and shall work together and co-operate in good faith and do all acts as may be necessary or required to fulfil the reasonable requirements of FAP; and

(iii) the Members hereby agree that upon the acceptance of the EOI by FAP, (subject to the Members obtaining all relevant approvals including their necessary corporate authorizations), the Members shall proceed:

     (a)     with the Financial and Tax Due Diligence on FAP to be carried out by mutually acceptable professional financial consultant;

     (b)     upon satisfactory finding of the Financial and Tax Due Diligence to conduct a further due diligence on other matters including but not limited to legal, operational, and  management (“Legal and Technical Due Diligence”);

    (c)     upon satisfactory finding of the Legal and Technical Due Diligence and upon each Member obtaining all relevant approvals including their necessary corporate authorizations, to proceed with proposal to invest up to 25% equity interest in FAP for the Project (“Proposal”); and

   (d)     thereafter upon successful acceptance by FAP of the Proposal, to execute the Consortium Agreement (within the period to be mutually agreed by the Members, as may be required by FAP), on terms and conditions to be mutually agreed by the Members and to form a special purpose vehicle company to acquire a stake in FAP and to undertake the Project.

4.       INFORMATION ON FWQ  

FWQ is a company incorporated under the laws of Pakistan and operating its business in Pakistan. FHB owns 65% equity interest in FWQ, and the balance of 35% equity interest are held by Westbury Group, a company based in Pakistan and involved in the business of trading, refining, manufacturing, shipping, storage, warehousing, insurance and industrial services throughout Pakistan.

The directors of FWQ are as follows:

(i) Dato’ Haris Fadzilah Hassan (Chairman);

(ii) Azman Ahmad;

(iii) Fakhrunniam Othman;

(iv) M. Bashir Janmohammed; and

(v) Abdul Rasheed Janmohammed.

5.       INFORMATION ON FAP

FAP, a public limited company incorporated under the laws of Pakistan, is a joint venture company between Fauji Foundation (“FF”), Akbar Group and National Bank of Pakistan. FAP is the concession holder of Pakistan’s fully automated dry cargo grains and fertilizer terminal with an installed handling capacity of 4 million metric tons per annum. The terminal holds transit storage in silos or warehouses for cargo within its perimeter. Since it began operations in 2010, FAP has been working with traders of dry cargo, providing solutions for ship berthing, unloading, storage and bagging.

FAP also has approximately 15 acres back up area which can be further developed to accommodate an additional 500,000 metric tons of storage. FAP is an approved contractor of United Nations World Food Program and it has exclusive rights for handling of dry non-containerized cargoes at Port Qasim, Pakistan.

6.       INTERESTS OF DIRECTORS, MAJOR SHAREHOLDERS AND/OR PERSONS CONNECTED WITH THEM

None of the directors or major shareholders of MMC, or persons connected with them have any interest, direct or indirect, in the MOU.

7.       FINANCIAL EFFECTS ON THE EXECUTION OF THE MOU

The execution of the MOU is not expected to have any material effect on the earnings, net assets and gearing of MMC Group for the financial year ending 31 December 2020.

8.       DURATION OF THE MOU

The MOU shall be effective from 3 January 2020, being the date of the execution of the same and shall remain valid for the period of two (2) years.

9.       FURTHER INFORMATION

MMC will make further announcements if there are material developments on the above matter.

This announcement is dated 6 January 2020.






Announcement Info

Company Name MMC CORPORATION BERHAD
Stock Name MMCCORP
Date Announced 06 Jan 2020
Category General Announcement for PLC
Reference Number GA1-06012020-00035