E&O, Japan firm to develop land

KUALA LUMPUR: Eastern & Oriental Bhd (E&O), through its indirect wholly owned unit KCB Holdings Sdn Bhd, has entered into an agreement with Sea Investment Three Pte Ltd (SEAI3) of Japan to build a project called The Mews at Kuala Lumpur City Centre.

SEAI3 is wholly owned by Mitsui Fudosan Residential Co Ltd, which in turn is a wholly owned unit of Mitsui Fudosan Co Ltd (Mitsui) of Japan. The land located in Jalan Yap Kwan Seng is owned by KCB Trading Sdn Bhd (KCBT), a wholly owned subsidiary of KCB Holdings.

In a filing with Bursa Malaysia yesterday, E&O said KCB Holdings and SEAI3 had executed a sale and purchase agreement (SPA) for SEAI3 to acquire a 49% stake in KCBT for RM41.3 million cash.

Of the amount, RM5.1 million is for the sale of shares, while the remaining RM36.2 million is the shareholder’s loan to be advanced by SEAI3 to KCBT.

The shareholders’ agreement will take effect today, the closing date of the SPA. Both parties plan to develop 256 units of serviced apartments on the land, with development work expected to start in the second quarter of 2013. The project is targeted for completion in four years.

KCBT obtained the development order from the authorities last May. Based on the audited consolidated financial statements of E&O as at March 31, 2012, the net book value of the land is RM59.6 million.

This article first appeared in The Edge Financial Daily, on March 21, 2013.