IREKA 8834 IREKA CORPORATION BERHAD unit's RM163.9 mil hospital extension job terminated

 IREKA 8834 IREKA CORPORATION BERHAD unit's RM163.9 mil hospital extension job terminated

KUALA LUMPUR (Jan 4): Ireka Corp Bhd said the RM163.9 million contract awarded to its unit Ireka Engineering & Construction Sdn Bhd (IECSB) back in end-June 2020 has been terminated.

According to a filing with Bursa Malaysia on Wednesday (Jan 4), the Practice Note 17 (PN17) company said the termination came as a result of a determination letter dated Dec 21, 2022, from Regency Specialist Hospital Sdn Bhd due to the “non-completion and failure to rectify” certain clauses of the contract, specifically Section 1(A) 1(B) 1(C) and 1(D).

“As a result of the determination letter, the contract was terminated and the employer (Regency Specialist Hospital) called for its performance bond,” the construction company added.

Ireka noted that the termination does not result in any adverse material or favourable financial impact on the company as IECSB is placed under an interim judicial manager as granted by the Kuala Lumpur High Court on Aug 8, 2022.

The contract awarded back in June 2020 was for the construction of a 10-storey hospital extension block in Johor, then carrying a value of RM163.9 million, according to a filing dated June 29, 2020.

Ireka in the filing said that the contract period was to run for 18 months, commencing from July 1, 2020, and to be completed on Dec 31, 2021. Â

Shares in Ireka Corp closed half a sen or 0.86% lower at 57.5 sen, giving the company a market capitalisation of RM130.98 million.

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