MRCB up after option period extended

KUALA LUMPUR (July 6): Malaysian Resources Corp Bhd (MRCB) rose as much as 11 sen or 8% after the builder and property developer extended the option period to buy Nusa Gapurna Development Sdn Bhd's assets.

Nusa Gapurna Development is linked to MRCB group managing director and major shareholder Tan Sri Mohamad Salim Fateh Din.

At 12:30pm, MRCB shares settled at RM1.49 for a market value of RM3.26 billion. MRCB saw some 28 million shares traded, making the stock Bursa Malaysia's second most-active entity.

AmInvestment Bank Bhd analyst Azman Hussin wrote in a note that AmInvestment maintained its MRCB share target price at RM1.89 with an unchanged "buy" call.

"Key risks to our call include lower-than-expected take-ups at its property development projects and delays at its construction projects," Azman said.

On Tuesday (July 4), MRCB said the company and Nusa Gapurna Development had signed a second supplemental agreement to further vary the terms of the right of first refusal (ROFR) call option agreement signed in 2013.

Under the supplemental agreement, MRCB said both companies agreed to extend the option period to at least 60 months from the expiry date of the ROFR period from the two months agreed earlier.

"Option period means the period commencing from the date of expiry of the ROFR period and ending on the day falling 60 months thereafter or any other extended date as may be agreed in writing between the parties," MRCB said. — theedgemarkets.com

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