ECM Libra secures up to RM130m banking facilities for Desaru beachfront hotel

 

PETALING JAYA (July 21): ECM Libra Group Bhd has secured banking facilities of up to RM130 million from RHB Bank Bhd for its indirect wholly-owned subsidiary, Desaru Beachfront 2 Sdn Bhd (DB2SB), to part-finance a proposed beachfront hotel development in Kota Tinggi, Johor.

In a Bursa Malaysia filing on Monday (July 20), the group said DB2SB had on July 17 accepted a term loan facility of up to RM120 million and revolving credit facilities of up to RM10 million, which will also be used to meet DB2SB’s general working capital requirements.

The project will be developed on a parcel of leasehold commercial land owned by DB2SB in Mukim Pantai Timur, Kota Tinggi.

The facilities are secured by, among others, a corporate guarantee from ECM Libra, as well as first legal charges over two parcels of leasehold commercial land in Kota Tinggi. One parcel, measuring 36,831 sq m (396,446 sq ft), is registered in the name of DB2SB, while another parcel, measuring 44,427 sq m (478,208 sq ft), is registered in the name of ECM Libra Beachfront Sdn Bhd, an indirect wholly-owned subsidiary of the group.

ECM Libra said the facilities are in line with its strategy to expand its hospitality portfolio, with the project to be funded via a mix of debt and internal funds.

The facilities are expected to increase the group’s gearing. Based on its audited financial position as at Dec 31, 2025, and assuming full drawdown, total borrowings would rise to RM188.1 million from RM58.1 million, with gearing rising to 0.96 times from 0.30 times.

The group said there will be no material impact on its net assets or earnings for the financial year ending Dec 31, 2026, as drawdowns are expected to be progressive in line with construction progress, with the first drawdown anticipated in the fourth quarter of 2026.

The acceptance of the facilities does not require shareholder approval. However, drawdown remains subject to the execution of financing and security documents, fulfilment of conditions precedent, and the necessary consents for the creation and perfection of the security documents.

The facilities also include covenants requiring executive chairman and major shareholder Datuk Lim Kian Onn and his family to remain substantial shareholders of ECM Libra, and restrict any change to DB2SB’s shareholding without the bank’s prior written consent.

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