KUALA LUMPUR (May 19): Encorp Bhd has teamed up with Jentayu Sustainables Bhd, formerly Ipmuda Bhd, to jointly develop a 1.6-acre piece of land at Bukit Kepayan in Kota Kinabalu, Sabah into one block of 10-storey condominium featuring 166 units, which will have a gross development value (GDV) of RM67.72 million.

Encorp group chief executive officer Hazurin Harun said the venture will be the group's first property development in Sabah as part of its expansion plan.

"This partnership presents an opportunity for Encorp to enhance its reputation to become a major player within the property industry in Sabah, which it sees as having a great potential. Encorp’s development projects are built with strong underlying concepts and designed to cater to the needs of our customers," he said in a statement on Wednesday (May 18).

"The estimated total cost for the proposed development is RM56.24 million, while the estimated gross profit is RM11.49 million," Encorp said in a separate bourse filing.

Encorp also said its indirect wholly-owned subsidiary Encorp Development Sdn Bhd (EDSB) has on Wednesday signed a JV agreement with Ipmuda Properties Sdn Bhd (IPSB) for the proposed development. IPSB is a wholly-owned subsidiary of Ipmuda Buildermart Sdn Bhd, which in turn is a wholly-owned unit of Jentayu.

Under the JV, IPSB will hold a 15% stake and EDSB the remaining 85%. "Jentayu will grant development rights to Encorp and in return, Jentayu will be entitled to a consideration sum equivalent to 15% of the GDV of the proposed development, with a minimum sum of RM10.8 million to a maximum sum of RM11.3 million," the filing said.

Encorp said it will fund the proposed development via internal funds and/or financing facilities.

"EDSB will complete any phase or phases of the proposed development as and when EDSB deems fit and [is to] keep IPSB informed of the progress thereof," it noted, adding that the proposed development, once completed, will have a positive financial impact on Encorp.

Meanwhile, Jentayu executive chairman Datuk Beroz Nikmal Mirdin said the JV is in line with the group’s effort towards asset rationalisation.

"Ultimately, our main focus is on our renewable energy (RE) venture. Therefore, the group’s strategy has been to monetise non-yielding assets and utilise the money generated for our RE business, areas which we have more experience in. The team has been working doubly hard to ensure the delivery of our RE projects and we remain steadfast in our journey to become the leading RE player in Malaysia," he added.

Barring any unforeseen circumstances, the proposed development is expected to commence by July 1, with completion by June 30, 2026.

Encorp shares closed up 0.5 sen or 2.08% at 24 sen on Wednesday, bringing it a market capitalisation of RM77.59 million. Jentayu shares ended the day 1.5 sen or 3.37% higher at 46 sen, valuing the group at RM147 million. 

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