Debt-free L&G poised for growth (Aug 7, 2009)

PETALING JAYA: Land & General Bhd (L&G), the master developer of Bandar Sri Damansara in Selangor is now debt-free following the full settlement of its RM657 million debt.

"We are ready for a new chapter of growth. With the completion of our debt repayments and zero gearing, we have healthy cash reserves that will provide sufficient working capital for the projects we have in the pipeline," said its managing director Low Gay Teck after an EGM today. 

Moving forward, L&G is focusing on its three core businesses: property development, plantation and education. In the property sector, L&G's efforts will centre on enhancing the value of Bandar Sri Damansara township, sourcing of new local and overseas land banks and exploring potential joint ventures and strategic alliances with land owners.

The group recently launched 8trium in Bandar Sri Damansara, a commercial project comprising office suites, retail and leisure facilities. It has also submitted a proposal for the development of high-end condominiums in the township.

"This new development will be the first of its kind in Malaysia. Only 50% of its 42-acre site will be developed, while the remaining half will be retained for eco-friendly recreational facilities. We believe this new project will add further value to the overall Bandar Sri Damansara township."

L & G settled the final payment of the outstanding redeemable convertible secured loan stocks (RCSLS) of RM71.7 million on June 30.

At the EGM on Aug 8, shareholders' approved the reduction of L&G shares' par value to 20 sen per share from its existing value of RM1, which subsequently eliminates all its accumulated losses. L&G's share premium of RM133 million (as of March 31) will be decreased to RM14.6 million.

Low said the capital reduction will result in the cancellation of paid-up capital that no longer represents the group's available assets.

"The credit resulting from this and the share premium reduction will be sufficient for us to fully eliminate our accumulated losses which amount to RM597.0 million as of March 31, 2009," he added.

As part of the corporate exercise, L&G had earlier disposed of the group's non-core assets and resulted in its remaining ones being locked until full settlement of the company's RCSLS.

"With full settlement of our RCSLS, L&G's previously encumbered assets are now freed, allowing us to take advantage of their inherent value which will be pivotal in rebuilding the group's financial strength and competitive edge," he said.