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- Mohd Fadhli said more than two thirds of its increased cash reserves will be invested in property projects in Tapah, Ulu Kelang and Bentong, Pahang.
KUALA LUMPUR (Sept 9): Classita Holdings Bhd (KL:CLASSITA), soon to be NexG Bina Bhd, is selling non-core assets, including part of its long-standing lingerie business, to fund property projects, aligning with new major shareholder NexG Bhd’s (KL:NEXG) focus on property and construction.
NexG bought a 32.61% stake in Classita for RM76.78 million, targeting its loss-making property and construction business, which includes a CIDB G7-certified unit able to handle large, complex construction projects.
At a press conference after an extraordinary general meeting, where shareholders approved the rebranding to NexG Bina, chief executive officer Mohd Fadhli Abdul Rahman said the group expects to grow its cash reserves from RM73.6 million to RM114.4 million to fund its projects, helped by:
- Selling an industrial land plot for RM6.7 million
- Selling 49% of its lingerie business for RM34.1 million (A management buyout by Choo Peng Hung, who is a director and part of Classita (M) Sdn Bhd and Marywah Industries (M) Sdn Bhd’s management team.)
Mohd Fadhli said the RM34.1 million sale of the lingerie business, a key part of the company for 39 years, was based on its total net asset value. He added that the sale helps the group focus more on property, construction, and infrastructure.
The buyer Choo served as managing director of Harvest Miracle Capital Bhd (KL:HM), previously known as Vortex Consolidated Bhd, from February 2018 to July 2023. He also used to hold a substantial 6.99% stake in Hong Seng Consolidated Bhd (KL:HONGSENG).
Mohd Fadhli said more than two thirds of its increased cash reserves will be invested in property projects in Tapah, Perak; Ulu Kelang, Selangor; and Bentong, Pahang.
Property pivot
Classita will allocate RM32.4 million each for its Tapah and Ulu Kelang projects, and RM20 million in Bentong Phase 1. Altogether, these projects have a combined gross development value (GDV) of RM213.33 million.
In Tapah— regarded by the group as its most promising location due to its proximity to UiTM Tapah and land gazetted for government buildings—it plans to develop 86 terrace houses on a 2.8-acre parcel with a GDV of RM34 million, primarily under a build-and-lease model.
Mohd Fadhli said demand is strong because UiTM Tapah has about 5,000 students, but its hostels only fit 3,000, so more student housing is needed.
They’re also converting 34 shoplots into student studios, expected to bring RM2.5 million in yearly rent with 5%-8% returns. The group will keep 9.94 acres for future projects.
The group is working on several projects:
- In Ulu Kelang, it is planning affordable housing mainly for the police, worth RM47.5 million, with rental (RM2.5 million) or sales profit potential (RM9.6 million).
- In Bentong, Phase 1 of a high-end housing project with a GDV of RM132.13 million, Kepayang Heights, is under construction, expected to finish by late 2027. Phase 2 plans, which include serviced apartments, are still being considered.
- In Kinta, Perak, it is selling one industrial plot for RM6.7 million and plans to sell another, while developing the rest for industrial use.
It is also planning more projects aligned with government plans, including police housing and expansions into education, healthcare, and transport to support national development.
Newly appointed chairman former inspector-general of Police Tan Sri Razarudin Husain said the company’s transformation into a property company is still in the early stages, but the group is showing it can deliver results while using capital recycling effectively.
Lion Pacific fuelled infrastructure ambitions
Classita is teaming up with Lion Pacific Sdn Bhd, a lesser-known company specialising in infrastructure and engineering, to bid for the MRT3 Systems Tender project. It brings technical know-how to support Classita’s bid.
According to Lion Pacific’s head of business development Balasubramaniyam Servai the MRT3 project includes train signalling, power, communications, and ticketing systems, with a contract value estimated between RM6 billion and RM7 billion. Lion Pacific plans to suggest a government concession model for the contract. Full tendering could start by the end of the year after an initial proposal in 2022.
No further details regarding the collaboration have been disclosed at this stage.
Lion Pacific, founded in 1990, has experience in telecom, civil engineering, railways, electrical power, and transport systems.
Lion Pacific previously partnered with George Kent Bhd (KL:GKENT) on the Ampang LRT project and is currently bidding on the Penang LRT and Johor ART with WCT Holdings Bhd (KL:WCT).
The company is mostly owned by Nor Faizura Mohamed Jamin, with an 82.9% stake, and reported RM2.3 million in revenue and a small net profit of RM184 in 2023, with assets of RM14.8 million and liabilities of RM6.65 million.
Other shareholders in the company include S Gumasundari Subramaniam with 10% interest, and Rosnah Kasim with a 7.1% stake. Gumasundari and Rosnah are also directors in the company along with Mohd Nizam Hasan.
Classita’s shares closed unchanged at 8.5 sen, giving the group a market capitalisation of RM104.78 million. The stock is up 41.67% year to date. The name change to NexG Bina Bhd will take effect once approved by the Companies Commission of Malaysia.
As Penang girds itself towards the last lap of its Penang2030 vision, check out how the residential segment is keeping pace in EdgeProp’s special report: PENANG Investing Towards 2030.
