Global Oriental's unit buys RM170.7m land to expand development activities

KUALA LUMPUR (June 6): Global Oriental Bhd's 51%-owned unit Sering Manis Sdn Bhd (SMSB) plans to acquire 113.2ha of freehold land in Mukim Bentong, Pahang, for RM170.67 million to expand its property development segment.

In a filing with Bursa Malaysia, Global Oriental said SMSB entered into a conditional sale and purchase agreement with property investor Panji Selera Sdn Bhd today.

It said the group has been continuously on the lookout for good opportunities to expand its property development activities.

"The proposed acquisition provides an opportunity for the group to increase the size of its landbank in order to enhance its future revenue and earnings," said Global Oriental.

It added that the land is surrounded by lush greenery and is close to Genting Highlands, which presented the group with the potential to develop a resort-like residential and commercial development.

The proposed acquisition will be funded by internally generated funds and bank borrowings.

"The purchase consideration for the proposed acquisition of RM170.67 million is based on the selling price of RM14 per square foot.

"It was arrived at on a willing-buyer and willing-seller basis after taking into consideration [independent] valuer Azmi and Co (Shah Alam) Sdn Bhd's valuation at RM180 million using the comparison method," it said.

The group said for illustration purposes, based on the group's latest audited consolidated financial statements for the financial year ended March 31, 2015 and "the assumption that RM119.47 million representing 70% of the total consideration is financed through bank borrowings, the pro forma net gearing position of the group as at March 31, 2015 would have increased from 0.58 times to 0.85 times".

The proposed acquisition is expected to be completed by early November 2016. — theedgemarkets.com

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