Serba Dinamik denies award of Abu Dhabi contract is a related party transaction

KUALA LUMPUR, June 21 -- Serba Dinamik Holdings Bhd has denied there was any element of related party transaction in the undertaking of Block 7 Investments LLC when the Abu Dhabi project win was first announced in April last year.

In a filing with Bursa Malaysia today, the company also clarified that Block 7 was incorporated in Abu Dhabi, United Arab Emirates (UAE), and not in the United States as reported in The Edge Weekly on June 17, 2021.

To recap, on April 12, 2020, its wholly-owned subsidiary Serba Dinamik International Ltd (SDIL) bagged a US$1.78 billion (US$1 = RM4.14) contract from Block 7 for the engineering, procurement and construction (EPC) of an innovation hub, academic campus, related facilities and information technology (IT) infrastructure in Abu Dhabi, UAE.

"In order to strengthen Serba Dinamik’s expansion of its business into a strategic asset ownership model, on March 2, 2021, Block 7’s ownership was transferred to EFIRE Capital Holdings Ltd," the company said.

According to Serba Dinamik, EFIRE is owned by LIWA Investment Holding and SDIL with 51 per cent and 49 per cent ownership, respectively. 

On completion of the transfer, the company said, EFIRE and LIWA owned Block 7 with 99 per cent and 1.0 per cent shareholding respectively, making SDIL an indirect minority shareholder of Block 7 effective from March 2, 2021.

Serba Dinamik said that on March 31, 2021, Block 7 signed a long-term land lease agreement with ZonesCorp/ Abu Dhabi Port, being one of the largest operators of purpose-built economic zones in the UAE and owned by the Abu Dhabi government to develop the Innovation Hub Project in the Industrial City of Abu Dhabi (ICAD).

"With the opportunity to participate in the project as an EPC contractor, SDIL was able to expand its EPC business segment. 

"Furthermore, with its participation as an equity shareholder, SDIL is also in a good position to provide facilities management services for the maintenance and upkeep of the project upon its completion and hence, benefit from the long-term stable income," it added.

Serba Dinamik said the structure described was undertaken in the best interest of the company for long-term shareholders’ value creation and earnings stability.

-- BERNAMA