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Wednesday, December 14, 2011

RHB Research maintains market perform on Faber, FV RM1.53 (Edge)

RHB Research Institute is maintaining its market perform call on FABER GROUP BHD [] and leaving its sum-of-parts fair value estimate of RM1.53 unchanged pending the outcome of a lawsuit filed by a UAE contractor

It said on Wednesday that Faber reported that its UAE subsidiary, Faber LLC, and Project Penyelenggaraan Lebuhraya Bhd (Propel) received a summons and statement of claim from the UAE contractor Al Femah Contracting and Transporting Establishment (Al Femah) amounting to about RM13.1 million.

The research house said the lawsuit against Faber is currently at a preliminary stage as Al Femah is seeking Al Dhafra Court’s approval to accept the case and serve summons to Faber and Propel in relation to the amounts claimed.

“Risks to our view are a failure to secure an extension to the concession agreement with the government; and delays in property launches and approvals, which could affect revenues from the property segment,” it said.

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