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- The land, it said, "can serve as an enlarged hub" for the Malaysian Research Accelerator for Technology & Innovation (MRANTI) Park, which is located 1.9km away and able to house hyperscale data centres.
KUALA LUMPUR (Sept 9): Malaysian Resources Corp Bhd (KL:MRCB) is buying the Employees Provident Fund’s (EPF) 80% stake in Bukit Jalil Sentral Property Sdn Bhd (BJSP) for RM1.58 billion in cash.
BJSP was set up to develop the 76.14-acre Bukit Jalil Sentral project, valued at RM21 billion. MRCB said the buyout comes as it reviews the approved mixed development plan from November 2020.
According to its filing with Bursa Malaysia, MRCB and EPF had discussed revising the original plan but could not reach an agreement, leading MRCB to proceed with the buyout.
The land, it said, "can serve as an enlarged hub" for the Malaysian Research Accelerator for Technology & Innovation (MRANTI) Park, which is located 1.9km away and able to house hyperscale data centres.
"However, the company will conduct feasibility and environmental studies before embarking on, including but not limited to, the development of any data centre on the lands," it said.
BJSP owns three pieces of land. The first area, 97,720 sq m, is a recreational park. The other two areas, 37,320 sq m and 173,800 sq m, are empty land.
MRCB’s unit Rukun Juang Sdn Bhd is buying the stake from EPF’s unit Tanjung Wibawa Sdn Bhd (TWSB), including 1.13 billion Class A preference shares. These shares give holders priority in receiving dividends and if the company closes down.
The acquisition gives MRCB full control of the RM2.06 billion project land, while allowing EPF to exit its investment, MRCB's filing said. The deal is deemed a related party transaction as the EPF owns about 36% stake in MRCB.
Aside from the lands' market value, the parties arrived at the RM1.58 billion price tag based on BJSP's net asset value of RM1.4 billion. EPF's cost of investment was RM1.14 billion.
Apart from the purchase price, Rukun Juang may also have to take on shareholders advances by EPF's TWSB to BJSP of RM69.21 million.
MRCB will pay for the purchase using its own money and/or loans, but the exact loan amount is still unknown.
The deal will increase MRCB's debt level from 0.2 to 0.6 times should it borrow about RM1.32 billion to pay the purchase price and shareholders advances.
The deal is also expected to add about 2.37 sen per share to MRCB’s profit, according to its filing.
The Malaysian government transferred three parcels of land to BJSP on April 17, 2018, as payment for Rukun Juang upgrading the National Sports Complex in Bukit Jalil. This transfer was based on a May 2017 agreement between MRCB, Rukun Juang, TWSB, and BJSP, which is still valid. Under the agreement, Rukun Juang sold the land to BJSP for RM1.43 billion, and Rukun Juang and EPF’s TWSB invested the same amount by buying new shares in BJSP to develop the land together. The deal was completed on Dec 4, 2020.
The acquisition would require the approvals of MRCB shareholders. AmInvestment Bank Bhd has been appointed as the principal adviser.
MRCB is also the master developer of KL Sentral, which is a mixed-used transit-oriented development in KL spanning 72 acres.
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