PUTRAJAYA (Nov 16): Gapurna Sdn Bhd, a company said to be 40% held by Employees Provident Fund (EPF), today (Friday) confirmed that it is in talks with Malaysian Resources Corporation Bhd (MRCB) for a merger between its unit Nusa Gapurna Development Sdn Bhd and the property group via share swap.
Speaking to reporters during a break at the final Economic Transformation Programme Progress Update (ETP Update) for this year, Gapurna's director Imran Salim said the group has started studying the proposal and a lot of detailing works will have to be done before a deal between the two parties could be achieved.
"The deal is still at an early stage, we have been in talks with MRCB for a possible share swap. We will have to get the agreement of our board, MRCB's board, shareholders. There are a lot of stakeholders that are having a say in the deal. This will result in a potential merger between MRCB and Gapurna," said Imran without explaining any further.
In July this year, The Edge weekly newspaper broke a story of a possible merger between Gapurna, which is linked to businessman Datuk Mohamad Salim Fateh Din, with MRCB. It was reported that Gapurna owns about 60 acres of prime land in Klang Valley, worth between RM11 billion to RM13 billion.
However, Gapurna has not decided yet whether to inject its entire land banks into MRCB or to just select a few to be included in the deal, a source told theedgemalaysia.com. This is because Gapurna will have to ensure that the deal will benefit itself as much as it will benefit MRCB.
Among Gapurna's land banks is a 40 acre land in Seksyen 52, Petaling Jaya, which will be redeveloped into a RM11 billion GDV real estate project called the PJ Sentral Garden City by Nusa Gapurna. The company plans to build six commercial blocks with retail components, that might feature a indoor ski arena.
According to Imran, the construction of PJ Sentral will start in the second or the third quarter of next year, with the first four blocks estimated to be completed in three years after the first brick was laid.
"One of the first four blocks has been sold to a corporation to turn it into its headquarters. The other three blocks have been tenanted to other corporations as well.These blocks will be built to cater to the specific needs of these corporations and that's why we need to start the construction as soon as possible," said Imran.
The 30-year old spokesman said PJ Sentral will incorporate green features such as electric cars charging pods to be installed at the parking bays. Car owners will be able to charge their electric cars and make payment through debit or credit cards.
To increase the value of PJ Sentral, Imran said the company is working with local works authorities such as Jabatan Kerja Raya (JKR) and Lembaga Lebuhraya Malaysia (LLM) to improve the connectivity between the development and the rest of Petaling Jaya and Klang Valley.
A proposed expressway connecting Damansara and Kinrara, the Kinrara-Damansara Expressway (KIDEX) has been approved and Gapurna is proposing for a direct link from the expressway be constructed in PJ Sentral, said Imran.
He also said once the project is completed, which could take about seven to eight years from now, Gapurna may consider to inject the assets of the company into a real estate investment trust (REIT).
"We will package all these buildings into a REIT. We may start with a private REIT first before we go into a public REIT. We have to ensure a good property portfolio to attract investors to subscribe to our REIT," added Imran.
When asked why Gapurna did not just choose to go public via an initial public offering of its shares, Imran said "there is no point for the group to go public and become a second tier listed property developer".
He said Gapurna is comfortable being a private company, thus if it wants to go public, it is better for it to go big, by joining forces with an established group like MRCB.
"We are taking a quantum leap to become a public listed entity through the possible merger. We see opportunity with MRCB, there is synergy between the group and Gapurna and we see the future potential to become a bigger entity through the merger," added Imran.
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