Ambang Sehati mulls raising BRDB stake

KUALA LUMPUR (Nov 23): Ambang Sehati Sdn Bhd, the major shareholder of Bandar Raya Developments Bhd (BRDB), is exploring the possibility of increasing its stake in the company, an exercise that may or may not result in a general offer for the rest of the shares it does not own.

In an announcement to Bursa Malaysia on Tuesday, BRDB said a representative of Ambang Sehati emphasised that the exercise to possibly raise its stake in the company is still at an evaluation stage.

"The board will issue further announcements to update on the developments, if any, as and when they occur," BRDB said.

The announcement by BRDB comes hot on the heels of a report in The Edge weekly, which touched on Ambang Sehati possibly taking the company private following its offer to acquire some of the assets in September met with resistance from minority shareholders.

The assets that Ambang Sehati had offered to acquire from BRDB are the Bangsar Shopping Centre and the Menara BRDB office block located next to it in Bangsar, the CapSquare Retail Centre and the Permas Jusco Mall in Johor Bahru for a total of RM914 million.

Following an outcry from minorities, the board had decided to undertake an open tender for the disposal of the assets on Sept 26.

In respect of the assets sale via tender, the board has decided to defer the tender exercise to the first quarter of next year after having considered the year-end holidays and also taking into account the intention of Ambang Sehati to increase its interest in BRDB.

Ambang Sehati is the second largest shareholder of BRDB with 18.92% while the largest block is held by Credit Suisse with 23.57%. However, the Credit Suisse block is an omnibus account where the shares of a multiple of investors are held under one account.

Ambang Sehati is a vehicle controlled by Akhbar Khan Mohamed Khan and Mohamed Moiz JM Ali Moiz who took over the company that was sold during the restructuring of Multi-Purpose Holdings Bhd (MPHB) in 1999.

The owner of MPHB then was Datuk Lim Thian Kiat and some within the investment banking circles do not discount the possibility of the Credit Suisse block being linked to him.

The latest development confirms speculation is rife among property industry officials who were of the view that the sale of the assets by tender will be delayed because an international valuer has yet to be appointed to evaluate the assets.

BRDB, whose prime properties were recently revalued, has net assets per share of RM3.57 while its share price is trading only at RM2.13. BRDB also has a 56.76% stake in particleboard manufacturer Mieco Chipboard Bhd.

On Tuesday, the property developer announced results for the third quarter ended Sept 30, where it registered a profit of RM28.4 million on a turnover of RM142.3 million. It is a vast improvement compared with the loss of RM745,000 last year on a turnover of RM127.6 million.

For the nine months, BRDB's net profit was RM49.8 million on a turnover of RM478.4 million. Last year, it recorded RM105.6 million on a turnover of RM468.8 million, supported by a gain from the adjustment to the fair value of Bangsar Shopping Complex.

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