KUALA LUMPUR (March 22): The Federal Land Development Authority (Felda), which owns 62.3% of Encorp Bhd, has entered into a joint-venture (JV) agreement with the latter to jointly complete the development of a project involving low- and medium-cost housing for Felda settlers in Chuping, Perlis for an estimated total cost of RM57.32 million.

In a bourse filing on Tuesday (March 22), Encorp said the project will be split into two phases for the development of 25 acres and 21 acres, respectively.

The filing also said phase one of the project, which involves the development and construction of 158 low-cost houses, 66 medium-cost houses and 17 shophouses, has been partially developed and deferred. 

Encorp said Felda plans to rehabilitate phase one of the project with its wholly-owned subsidiary Encorp Development Sdn Bhd (EDSB) as the holder of the development licence and any obligation on the part of Encorp under the JV agreement.

Encorp said it expects to complete phase one of the project within 18 months from the date of the JV.

Phase two of the project — comprising 102 low-cost houses, 112 medium-cost houses, 56 semi-detached houses and 13 shophouses — is expected to be completed within 36 months from the date of completion of phase one but not exceeding 54 months from the date of the JV agreement, read the filing.

According to the filing, Felda will be sharing with Encorp 20% and 25% of the total estimated gross development profit of RM31 million for phase one and phase two of the project, respectively.

Encorp said the JV provides for a strategic partnership and is in line with its business strategy to grow its construction segment while enabling Felda to complete and deliver the affordable housing scheme to promote the social and economic activities on the land.

It added that the project will be funded via internally generated funds and/or financing facilities.

At the time of writing, Encorp shares were half a sen or 1.9% lower at 25.5 sen, giving it a market capitalisation of RM80.8 million based on 316.68 million outstanding shares.

Edited by Surin Murugiah

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