1. Introduction

The Board of Directors of BHS Industries Berhad (“Company”) wishes to announce that the Company has on 1 November 2016 entered into a Memorandum of Agreement (“MOA”) with China Nuclear Industry Huaxing Construction Co., Ltd. (hereinafter referred to the “Parties”) to work together to develop and manage the Phase 2 & 3 of the Green Technology Park, its power generation station and other auxiliary facilities.

Green Technology Park is a park where the main industries locating in there are using the Green Technology to convert the Oil Palm Empty Fruit Bunches into pulp and paper, box liner paper, corrugated paper and tissue paper. Phase 2 may involve a factory with a capacity to produce 100,000 metric tons of box liner paper and 120,000 metric tons of corrugated paper whilst Phase 3 involving another factory with a capacity to produce 65,000 metric tons of tissue paper.   

The MOA aims to set out cooperation intention of the Parties before signing the formal cooperation agreement. Specific rights and obligations of the Parties shall be defined in follow-up Cooperation Agreement or SPV Agreement.

2. Information on China Nuclear Industry Huaxing Construction Co., Ltd.

China Nuclear Industry Huaxing Construction Co., Ltd. (“Huaxing”), founded in China 1958, is a subsidiary of China Nuclear Engineering Group Corporation, a state central management company. Huaxing is a well-known construction company in China as well as a leading enterprise of nuclear power construction domestically in China and overseas.

3. Rationale for the MOA

The Parties shall collaborate and work together to jointly construct and operate the Phase 2 & 3 of the Green Technology Park, Pekan Project. The Parties will jointly invest to establish a SPV company, which shall be operated together.

4. Effects of the MOA

The MOA is not expected to have any material effect on the earnings per share, net assets per share, gearing, share capital and substantial shareholders’ shareholding of the Company for the financial year ending 30 June 2017. It is expected to contribute positively to the future earnings of the Group upon the completion of Phase 2 and 3 of the Green Technology Park.

5. Directors’ and major shareholders’ interest

None of the Directors and/or other major shareholders of the Company and/ or any persons connected to them have any interest, direct or indirect, in the MOA.

6. Statement by Directors

The Board of Directors of the Company, having taken into consideration all aspects of the MOA, is of the opinion that the MOA is in the best interest of the Company and its subsidiaries.

7. Approvals required

The MOA is not subject to approval of the shareholders of the Company and any relevant government authorities. 

This announcement is dated 1 November 2016.