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KUALA LUMPUR: FCW Holdings Bhd entered into a joint venture (JV) with IJM Land Bhd to develop four parcels of land in Segambut, KL, into mixed residential and commercial property projects.
In an announcement yesterday, FCW said the JV company, 368 Segambut Sdn Bhd, would acquire the parcels measuring 671,334 sq ft for RM188 million.
The land is to be acquired from FCW’s two wholly-owned subsidiaries — FCW Industries Sdn Bhd and Federal Telecommunications Sdn Bhd.
The original cost of investment by the two companies in the land was RM90.8 million. FCW, an investment holding and management services company, is expected to register a gain of RM96.8 million based on a sales consideration of RM188 million. The proceeds will be used to redeem preference shares and for working capital.
The approved usage for three of the four parcels is for industrial development while the fourth is for the cultivation of coffee.
Since it is a related party transaction, FCW has to get shareholder approval for the land sale before it can be completed.
According to FCW, which is controlled by low-profile Tan Sri Robert Tan Hua Choon, the sale consideration of the parcels was arrived at after taking into account the original cost of investment and a report by a valuer that valued the land at RM280 psf.
FCW hogged the limelight last Tuesday when the stock hit limit-up to as high as RM1.22.
The unusual market activity prompted a query from Bursa Malaysia to which the company replied that it was in the process of entering into an agreement to develop the land parcels it owns in Segambut.
FCW’s stock has been under-performing the market and long-time investors view the potential land development as a catalyst for re-rating.
The counter closed unchanged at RM1.13 yesterday, giving FCW a market capitalisation of RM223.6 million.
This article first appeared in The Edge Financial Daily, on September 20, 2013.
