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Sunday, September 13, 2009

LCL seeks partners for UAE projects

DUBAI: Interior fit-out (IFO) group LCL Corp Bhd will be looking at strategic partnerships with both local and foreign parties to financially support the sustainability of its future projects in the United Arab Emirates (UAE), according to group managing director Datuk Low Chin Meng.

He said LCL expected to finalise a strategic partnership with a public-listed Malaysian construction company with on-going projects in Abu Dhabi by the end of the month.

At the same time, the group was negotiating with parties from Abu Dhabi for other strategic partnerships, Low told Malaysian media in Dubai recently.

LCL is a well-known group in the UAE, especially in Dubai, for its IFO projects such as the newly-launched RM28bil Dubai Metro, dubbed the world’s longest fully-automated driverless metro system, the Dubai Mall Hotel and Dubai Marina Hotel.

The group was also involved in the IFO works in Dubai’s latest and luxury Atlantis The Palm Hotel.

To date, LCL has five major contracts in Dubai with the size of RM50mil each.

“We still have confidence in the property market in Dubai but given the current slowdown and slow recovery rate possibly in another one-year period as anticipated by industry experts, LCL will now focus on IFO projects in Abu Dhabi. Our interest will be in government-funded projects, such as hospitals, universities and clinics,” said Low.

On the group’s operation in Dubai, Low said: “We will not be taking many new jobs in Dubai.

“Despite the tough market conditions, we still have confidence that Dubai will recover and we will not throw in our towel just yet. Unlike some other contractors, we have a good track record of completing our jobs in Dubai.”

Low admitted that the group’s cashflow was heavily affected by the tight liquidity situation in Dubai, resulting in losses to the group.

However, he said: “We are currently in the process of recovering our claims and entitlements from property developers in Dubai estimated at not less than RM200mil.

“We have a strong case to make these claims as we have completed our jobs and expect these claims to materialise within the next eight to 10 months. This will lead to a substantial reduction in our high borrowings.”

Currently, the group gearing ratio is about three times.

By The Star (by Hanim Adnan)

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