KUALA LUMPUR (Sept 12): Sarawak-based property developer Ibraco Bhd has proposed to buy four parcels of vacant freehold land in Petaling Jaya, Selangor, measuring a total of 15,811.16 sq m for RM37.44 million.
The price for acquiring the Petaling Jaya lands has been adjusted to around RM220 per sq ft, Ibraco added.
The land acquisition move, which marked its second venture in expanding its business in West Malaysia, was formalised after Ibraco inked sales and purchase agreements with two firms: Milan Sanctuary Sdn Bhd and Jurapat Sdn Bhd.
According to Ibraco, the lands — which is fronting the New Pantai Expressway — had received a development order from the local authority, Majlis Bandaraya Petaling Jaya, for a mixed commercial development.
"The company has yet to determine the budgeted gross development value and gross profit to be generated from the development of the land at this juncture," Ibraco, which has a strong footprint in Kuching and Bintulu, said in a filing with Bursa Malaysia yesterday.
Ibraco said the latest land acquisition is "appropriate" and formed part of its "strategic investment", believing that "it is time to further expand its market share in West Malaysia".
"The development of the [lands] would help enhance the future earning potential of Ibraco Group and its presence in West Malaysia," the property developer added.
Without disclosing the identity of Milan Sanctuary's and Jurapat's shareholders, Ibraco said the lands' price tag was arrived on a "willing-buyer willing-seller" basis.
To satisfy the land purchase, Ibraco said it will be settled via a combination of debt and equity, with 30% to be paid from its cash hoard while the remaining 70% will be paid via bank borrowings, which is expected to push up its gearing to 0.52 times from 0.44 times currently.
As at end-June, Ibraco's cash balance stood at RM15.08 million, while total borrowings hovered at RM154.02 million.
Ibraco expects to complete the Petaling Jaya land acquisition within the next 360 days from yesterday.
Shares in Main Market-listed Ibraco were not traded yesterday. The counter last closed at 88 sen on Sept 8, giving it a market capitalisation of RM436.84 million. — theedgemarkets.com