CME to partner Aussie firms in A$112m project

KUALA LUMPUR: CME Group Bhd has proposed a joint venture (JV) with two Australian companies to develop two parcels of contiguous freehold land in Western Australia, with an estimated gross development value (GDV) of A$112 million (RM331.42 million).

The companies are Ruark Properties Pty Ltd and Central Park (QLD) Pty Ltd, which are principally involved in property development.

In a filing with Bursa Malaysia yesterday, the group said the land, measuring 15,784 sq m, is in the local government area of Mandurah, one of the most vibrant regional cities in Western Australia and 75km south of the Perth Central Business District.

CME said it aims to diversify into the property development and property investment sectors with the acquisitions.

Bringing in the JV partners to jointly develop the land is part of its risk mitigating strategy as it has no prior experience in property development, it added.

The cost of acquiring the two parcels of land totalled some RM30 million and the group estimates that their gross development cost would be around A$90.45 million.

The group intends to fund the initial costs of the project — which includes the sum to acquire the land and the holding costs incurred during the development, as well as 70% of the initial start-up costs required to commence the JV — through internal funds or bank borrowings.

“The parties are expected to obtain loans on their own to fund the JV costs or facility to undertake the project,” it noted.

In the same filing, the group also announced an employee share option scheme of 10 sen each for up to 15% of its issued share capital.

This article first appeared in The Edge Financial Daily, on August 13, 2014.



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