Gamuda buys Salak Land to gain 619ha tract

KUALA LUMPUR: Gamuda Bhd plans to acquire the entire stake in Salak Land Development Sdn Bhd for RM784.328 million cash as it hopes to gain ownership of the latter’s 619ha tract of land located right next to Expressway Lingkaran Tengah (Elite Highway).

In a filing with Bursa Malaysia yesterday, Gamuda said it had signed a share sale agreement last Thursday with Salak Land’s parent company, property developer Salak Park Sdn Bhd, to seal the deal.

Salak Land, a private limited company that was incorporated on Aug 3, 1994, has an authorised share capital of RM25 million comprising 25 million shares, of which 10.8 million are issued and fully paid up.

Salak Land’s leasehold land, which Gamuda is eyeing, is situated in a mature area of Selangor with positive prospects for mixed property development.

The land is currently classified as agricultural land, with its lease tenure expiring on Oct 6, 2093.

Gamuda said the proposed acquisition would enable the group to gain ownership of the land, and hence increase its land bank to further establish its position in property development. The acquisition is also aimed at increasing the group’s investment property portfolio to provide long-term earnings growth.

It added that the acquisition is expected to contribute positively to the group’s future earnings and thereby improve shareholders’ value over the medium- to long-term period.

“The land is envisaged to be developed into a new suburbia — a contemporary comprehensive township to meet the ever dynamic market demands by tapping into the great prospects of the burgeoning market in the Klang Valley besides expanding our market reach down south to Nilai and Seremban,” said Gamuda.

The land is accessible via Jalan Klang-Banting and Jalan B18. If travelling from Petaling Jaya or Kuala Lumpur, the land is also accessible via the Shah Alam Expressway as well as the Elite Highway through the KLIA interchange.

Gamuda said the acquisition will be financed through internally generated funds and bank borrowings. It is expected to be completed by the fourth quarter of 2014.

This article first appeared in The Edge Financial Daily, on August 5, 2014.