KUALA LUMPUR (June 30): Boon Koon Group Bhd, which specialises in rebuilt commercial vehicles, intends to diversify into property development.

To do that, Boon Koon will jointly develop a residential project with Platinum Eminent Sdn Bhd, a wholly-owned subsidiary of Aera Property Group Sdn Bhd, in which its controlling shareholder Datuk Seri Chiau Beng Teik is also the stakeholder.

In the filing with Bursa Malaysia yesterday, Boon Koon announced that it had entered into a joint development agreement with Platinum Eminent.

Under the joint development agreement, Boon Koon’s wholly-owned subsidiary BKG Development Sdn Bhd will have to pay an upfront participation fee of RM20 million, which in turn will entitle BKG to 60% of the gross development profits of the project, which is estimated to be RM93.5 million.

The development project, which is known as Aera Service Residence, has an estimated gross development value of RM306.1 million.

“The expansion of Boon Koon Group’s business into property development is part of the company’s strategy of diversifying into other industries with strong growth prospects instead of depending solely on its existing core manufacturing business,” it said.

This article first appeared in The Edge Financial Daily, on June 30, 2017.

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