Eco Buildings Group PLC shares climbed on Wednesday, after it announced it is moving into Indonesia with a new subsidiary backed by a US$5 million commitment from a local partner, as the modular construction group looks to build an on-the-ground manufacturing base without leaning on group cash.
The AIM-listed company said it will establish Eco Buildings Indonesia LLC and has signed a binding MOU with Messrs Cooper & Accors (MCA), a local partner it describes as two executives with more than 30 years’ regional experience in construction and finance. Under the deal structure, MCA will subscribe US$5m for a 49% stake in the subsidiary, with the funds earmarked to cover the installation of a new production line in the country.
Eco Buildings said MCA will also cover ongoing operational costs and local cashflows, while taking responsibility for day-to-day operations including the manufacturing facilities, a set-up the company says reduces funding requirements at group level.
The group expects the Indonesian production facility to be operational by the end of 2026, positioning it to pursue modular housing programmes in the region using its GFRG building technology.
In London, Eco Buidings shares gained around 7% changing hands at 12.28p, having seen as high as 18.5p earlier in the session.