Encorp to raise RM67 million to fund expansion

KUALA LUMPUR: Encorp Bhd expects to raise about RM67 million after shareholders approved the Proposed Rights Issue and Proposed Placement of Redeemable Convertible Secured Loan Stocks with free warrants at its Extraordinary General Meeting held in Kuching on Wednesday, Jan 12.

The exercise is to enable Encorp to fund capital, project development and construction expenditure requirements, it said in a press statement on the same day.

Encorp's executive chairman and group chief executive officer Senator Datuk Sri Mohd Effendi Norwawi expects the exercise to contribute significantly to its business growth and expansion.

"We are optimistic given the positive signs of economic improvement especially in the second half of 2010, and we want to capitalise on opportunities to grow and enhance earnings. We need to expand our existing land bank in strategic locations as well," said Effendi.

Encorp is expanding from its current signature projects Encorp Strand in Kota Damansara and Encorp Cahaya Alam in Shah Alam with a portfolio of new projects scheduled to be launched in 2011.

Among them are hillside villas in Batu Feringghi, Penang; a condominium in Puteri Harbour, Nusajaya, following its latest land bank acquisition in the waterfront precinct of Johor; as well as Encorp's first overseas project, an exclusive apartment project in Perth, Australia.

Encorp's financial performance has been positive, posting a net profit of RM6.8 million for 3Q 2010, a significant increase from the RM1.05 million recorded in the previous quarter. The result also represents an increase from RM4.5 million from a year ago.

"We are in a good position to become more competitive and have big plans for Encorp to become a leading property developer. We aim to give buyers of all our products the Encorp Experience by delivering outstanding Quality, Standards, Value and Services (QSVS) in all our projects," said Effendi.

He added that the best developers are those that consistently innovate in concepts and designs.

"Combining this strength with stringent quality, delivery system and processes, will give customers the best value for their money and further see their products appreciate with time," he said.

Encorp recently won the inaugural The Edge-PEPS Value Creation Award 2010 for Encorp Strand, an accolade for properties that attained the greatest value creation in terms of capital appreciation and sustainable value.

The award, it said, is a testament to the high appreciation values resulting from the attractive concept within the development. With future projects being undertaken with a similar mindset, Encorp expects to repeat its value creation success.

"We are grateful to our customers for believing in us and contributing to our success so far. Now we are eager to move forward and keep growing. Strategically, we want to ensure that the 'Encorp Experience' is shared by all stakeholders, and we are fully committed to providing unbeatable QSVS in all of our products," Effendi concluded.  

The Rights Issue and Placement are expected to be completed in the first half of this year.