Aizo sewage subcontract ends after main contract cancellation
Puncak Utara has reserved its right to seek compensation for losses, while Aizo has not disclosed any potential claim amount.
Aizo Group Bhd said a RM36.79 million subcontract for sewage upgrades in Terengganu would not go ahead following the project owner's cancellation of the main contract held by Puncak Utara Sdn Bhd.
In its Bursa Malaysia filing on Oct 22, Aizo said Lembaga Kemajuan Terengganu Tengah (Ketengah) had sent Puncak Utara a termination letter. Puncak Utara then informed Aizo and reserved its right to claim losses from the company. Neither the reason for cancellation nor the possible claim amount was disclosed.
Aizo said the effect on earnings and net assets for its financial year ending June 30, 2027 (FY2027) remained dependent on discussions with Puncak Utara, reconciliation of work completed and potential claims. It said its core operations would be unaffected, with other construction and energy projects continuing.
Wholly-owned subsidiary Aizo Engineering Sdn Bhd obtained the subcontract in July 2024. It covered sewage and associated infrastructure upgrades in Ketengah Jaya, Bukit Besi and Seri Bandi, and was originally due for completion on June 23, 2027.
Separately, Aizo obtained a RM9.09 million subcontract in July for road and drainage construction at a proposed transit-oriented development in Cheras, Kuala Lumpur. Its shares ended trading unchanged at 35 sen on Oct 22, giving it a market value of RM75 million.
