KUALA LUMPUR (June 6): Integrated poultry DBE Gurney Resources Bhd plans to acquire a piece of leasehold land in Kinta, Perak for RM5.39 million, in line with its diversification strategy into property development.

In a filing with Bursa Malaysia, DBE Gurney said its wholly-owned subsidiary DBE Development Sdn Bhd (DDSB) has entered into a conditional sale and purchase agreement (SPA) with Glitter Holdings Sdn Bhd.

“The Proposed Land Acquisition is in line with the group’s strategy to diversify into property development with stronger growth prospects, instead of depending solely on its existing poultry business,” the filing said.

Measuring about 11.33 hectares or 28 acres, the land has a market value of RM6.9 million.

The type of development for the project will be terrace, semi-detached and bungalow houses (landed residential), details of which will be determined and finalised at a later stage, DBE Gurney added.

With a potential gross development value (GDV) of approximately RM55.6 million, the board believes the proposed land acquisition shall contribute positively to the group’s future earnings and strengthen its financial position.

While the proposed land acquisition is not expected to have any material effect on the group’s earnings and earnings per share for the financial year ending Dec 31, 2018 (FY18), the proposed development is expected to contribute positively to the earnings of group in future.

The proposed acquisition will also further enhance the group’s reputation and positioning as a property developer in Malaysia, moving forward, DBE Gurney added.

The company said the purchase consideration and development cost of the land shall be funded via its internally-generated funds from the proposed development, as well as the remaining unutilised proceeds raised from the company’s redeemable convertible notes.

Nonetheless, the company shall still consider bank borrowings and that the exact mix of the financing structure will be determined by the company’s management at a later stage, DBE Gurney said.

Barring any unforeseen circumstances, the proposed land acquisition is expected to be completed within five years from the date of the SPA.

DBE Gurney noted that the legal and beneficial ownership of the land shall be transferred to DDSB by fourth quarter of 2018, following the registration of the Memorandum of Transfer.

Shares of DBE Gurney closed half a sen or 16.67% higher at 3.5 sen yesterday, for a market capitalisation of RM80.35 million. — theedgemarkets.com

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