KUALA LUMPUR: IJM Corporation Bhd's planned purchase of a 44.83 per cent stake in Pestech International Bhd has been terminated but Pestech's joint venture with IJM's unit to complete the Kuala Lumpur International Airport (KLIA) aerotrain replacement project is not affected.
Pestech in its filing with Bursa Malaysia Securities yesterday said the termination was due to the non-fulfilment of the conditions precedent pursuant to the subscription agreement.
The company said the mutual termination does not affect the company's current joint venture with IJM Construction Sdn Bhd (IJMC) for the KLIA aerotrain replacement project, which is to be completed by the first quarter of 2025.
"In view of the above, the board had on the even date decided to abort the proposals. The board is currently exploring other alternative fund-raising proposals to meet its funding requirements, the details of which will be announced in due course," it added.
IJM Corp's offer for Pestech was considered a lifeline for the company which suffered a major setback when Malaysia Airports Holdings Bhd (MAHB) terminated its contract to design and supply the RM743 million Kuala Lumpur International Airport aerotrain project, in August last year.
Since then however, MAHB has signed an agreement with Alstom Transport Systems (Malaysia) Sdn Bhd and a JV involving IJMC and Pestech Technology Sdn Bhd (IJMC-Pestech JV) to complete the KLIA aerotrain replacement project.
Pestech last traded at 17 sen a share, giving it a market capitalisation of RM164.84 million.