KUALA LUMPUR (Sept 30): Titijaya Land Bhd is planning to buy a firm that owns two tracts of land totalling 46.2 acres in Bukit Raja, Selangor, which Titijaya intends to develop into a mixed project with a gross development value of RM2.4 billion.

According to Titijaya's bourse filing today, it is proposing to buy NPO Builders Sdn Bhd for RM115.6 million, by issuing 79.73 million new shares at an issue price of RM1.45 apiece. 

The bigger plot of the lands is a 33.21 acre residential tract, while the remainder is a 12.99 acre commercial one. 

The proposed development on the tracts will comprise commercial shops, serviced apartments and affordable homes, said Titijaya. It expects to start the project in the second half of next year, with targeted completion by the second half of 2027.

“The [parcels of land] are located in a strategic area with significant infrastructural improvements undertaken over the past years which have provided spill over effects to the Sungai Buloh localities and significantly boosted developments,” read Titijaya’s announcement.

The proposed development is expected to be funded through a combination of internally generated funds of TLB and its subsidiaries.

NPO Builders is 51%-owned by Titi Kaya Sdn Bhd, a 48.32% subsidiary of Brem Holdings Bhd. The remainder stake is equally split between Lee Eng wah and Lim Wen Yeh.

Titijaya said it has inked three separate conditional share sale agreements with the vendors to effect the purchase.

The first is between Titijaya and Titi Kaya for the latter’s 51% stake for RM45.18 million. The second and third agreement is for a payment of RM19.93 million, each, to Eng Wah and Wen Yeh for their respective stakes in NPO Builders.

The balance of RM30.57 million is to settle advances from the vendors for the part payment of the cost of acquiring the lands, and development costs incurred.

The proposed acquisition is expected to dilute the stake of its shareholders. 

The Lim family's stake, held via Titijaya Group Sdn Bhd, could be trimmed from 58.38% stake to 48.74%, or to 49.44% if its redeemable convertible preference shares were fully converted prior to the acquisition.

Titijaya expects the acquisition to be completed in the first quarter of 2017.

Titijaya's share price closed five sen or 3.23% higher at RM1.60 today, valuing it at RM645.33 million.— theedgemarkets.com

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