MRCB buys DBKL land for RM335.5 mil

KUALA LUMPUR (June 16): Malaysian Resources Corp Bhd (MRCB), which is in the midst of undertaking a rights issue, is buying three parcels of land from Kuala Lumpur City Hall (DBKL) for RM335.5 million cash.

In a filing with Bursa Malaysia yesterday, MRCB said its indirect subsidiary unit, Metro Spectacular Sdn Bhd, has entered into a sale and purchase agreement with DBKL for the land acquisition.

Metro Spectacular is a 51%-owned subsidiary of MRCB Land Sdn Bhd, which in turn is a wholly-owned unit of MRCB.

The three plots of land, situated along Jalan Putra approximately 4km from north Kuala Lumpur, collectively measure approximately 40,720.5 square metres (sq m). The first plot measures about 20,491.6 sq m, while the second and third tracts measure 2,240 sq m and 17.988.92 sq m respectively.

MRCB said the proposed land acquisition is in line with the group’s growth strategy to “increase its land bank with suitable land” in order to sustain its core business as a property development, engineering and construction company.

“The strategic location of the land and connectivity to public transport infrastructure have made it a sought-after address in Kuala Lumpur,” MRCB said.

“The board is confident of prospects for the land after taking into consideration the scarcity of prime land in Kuala Lumpur for sizeable commercial development,” the group said in the filing.

MRCB said the purchase consideration was arrived at on a “as is where is” basis, free from all encumbrances and with vacant possession, and having considered the development potential of, and prospects for, the land.

The proposed land acquisition, said the group, will be financed through a combination of internally generated funds and/or external borrowings.

The proposed land acquisition is not expected to have any material effect on the earnings of the MRCB group for the financial year ending Dec 31, 2017 (FY17), according to the filing. MRCB said while the land purchase will not have any material effect on its net assets per share, the group’s gearing for FY17 is expected to increase by the amount of loans it may secure to finance the acquisition.

MRCB said barring any unforeseen circumstances, the proposed land acquisition is expected to be completed by the fourth quarter of 2017.

This article first appeared in The Edge Financial Daily, on June 16, 2017.

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