Ipmuda to acquire land for a total cash consideration of RM15.5 million

KUALA LUMPUR: Ipmuda Bhd had entered into a conditional Sale and Purchase Agreement with Maju Holdings Bhd to acquire a vacant piece of freehold development land in Jalan Mayang, Kuala Lumpur city centre, 200m from the Petronas Twin Towers for a purchase consideration of RM15.5 million.

“The proposed acquisition is a good opportunity for Ipmuda group to invest in the property as part of its landbank for future development purposes. The proposed acquisition is also in tandem with the company’s corporate strategy where it will scout for businesses which bring synergies and value innovation,” said Ipmuda Bursa announcement.

The land measuring 1,357.64 sq m had been issued a development order by Kuala Lumpur City Hall (DBKL) on Jan 22, 2008, for the construction of one block of 16-storey apartment (13 units), including 1-storey of residents’ community space, a 1-storey roof garden and 2-storey of basement car parks.

The building plans, which were submitted on Sept 15, 2009, are pending approval from DBKL.

The proposed development is expected to commence in the second quarter of next year, with an estimated development period of 28 months.

The estimated gross development value of the proposed development is RM71.30 million and the estimated gross development cost is RM38.72 million, yielding a gross profit of RM17.08 million.

The property development project would complement the existing core businesses of Ipmuda Group including the trading of building materials.

With such efforts, Ipmuda could diversify its source of revenue and income stream into the property development segment, it added.

“In addition, the proposed acquisition will allow Ipmuda to recover the amount of outstanding debt owing by Maju Holdings that has been long outstanding for more than two years,” Ipmuda said.

Upon completion of the proposed acquisition, Ipmuda Group would be exposed to certain risks inherent in the property sector such as loss of attractiveness of the property and competition from surrounding projects.

In addition, there can be no assurance that the anticipated benefits of the proposed acquisition will be realised or that the company will be able to generate sufficient future revenue from the proposed acquisition to offset the associated acquisition costs of the property.

“The company will however, seek to mitigate such risks by conducting periodic feasibility assessments on the property as well as continuously monitoring Ipmuda Group’s investment strategies,” it said.