O&C in JV to develop RM166 mil mixed development project

KUALA LUMPUR (Aug 10): O&C Resources Bhd is entering into a 50:50 joint venture (JV) with Yayasan Pahang to develop a RM166 million mixed development project in Kuantan.

Under the deal signed today, 100 acres of Yayasan Pahang's 814-acre land will be developed, with work to commence in the first half of O&C's financial year ending July 31, 2018 (FY18).

The mixed development will comprise 979 units of 20 by 70 square feet terraced houses, 17 units of semi-detached houses measuring 40 by 90 square feet, and 112 units of 40 by 80 square feet semi-detached houses, O&C said.

It will also include 41 units of shop lot offices, O&C said in a filing to Bursa Malaysia.

Yayasan Pahang, which owns the leasehold land, has granted the JV company the exclusive right to develop the land and sell the units and commercial developments subject to terms and conditions, O&C said.

O&C intends to fund the JV through a fundraising exercise, internally generated funds, and/or bank borrowings.

Meanwhile, the JV company will owe Yayasan Pahang RM7 million in consideration of its development rights, for which it will pay RM8,000 for each of the units sold until the total consideration is satisfied.

"Yayasan Pahang will also take a 50% cut of the profits under the development or a guarantee of RM5 million, whichever is higher upon completion of the development, it said.

O&C's share price closed up 1.5 sen or 2.68% at 57.5 sen, giving a market capitalisation of RM145.28 million. — theedgemarkets.com

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