KUALA LUMPUR: KYM Holdings Bhd, which had recently proposed to acquire Harta Makmur Sdn Bhd — the owner of three leasehold tracts in Teluk Batik, Perak, measuring 311,253 sq m (76.91 acres) — intends to change the development plans of the tracts from that of tourism-related projects to commercial and housing ones, the group said in reply to a Bursa Malaysia query on Tuesday, Mar 15.
The group said it intended to change the development plans as tourism-related developments were "capital intensive", and changing the plans would also "preclude other persons to have a minority interest in Harta Makmur and therefore a share of the profits".
The group has proposed to develop commercial and residential developments with an estimated gross development value of RM500 million, a gross development cost of RM350 million and a gross development profit of RM150 million.
While the components have not been determined yet, the group had cited multi-storey shop offices, condominiums, apartments, semi-detached houses and bungalows as examples of the type of proposed development.
KYM expects to start the project in the first quarter of 2012, with development to take place in stages over the next three to 10 years.
The group expects to finance the development via a mix of internally-generated funds and bank borrowings.
To recap, KYM had entered into a share sale agreement with RAS Sdn Bhd on Mar 10 to acquire the remaining 40% stake in Harta Makmur not already owned by KYM via its unit Tegas Consolidated Sdn Bhd for RM41 million cash.
The price was arrived at based upon, among other things, the development potential of the Teluk Batik lands.
"The above development plans can also be implemented in tandem with the provision of temporary housing for an estimated 4,000 workers to be employed during the three to five years construction period for the proposed development by (Vale International SA) of an iron ore distribution centre and pellet plant at the nearby Teluk Rubiah (Vale Project) which will generate income other than development profits," KYM said.
"Two other parcels of land in the vicinity of the Vale Project have already been transacted at RM23 psf before the confirmation by Vale International in February 2011 to proceed with the implementation of its project," it added.
Harta Makmur had sold 1,165 acres of land from 1,250 acres of land in Teluk Rubiah, Perak, earmarked for a major resort development, to Vale International SA and Vale Malaysia Manfuacturing Sdn Bhd last year for RM196 million cash.
According to a valuation by TD Aziz Sdn Bhd, the land had an indicative market value of RM15.23 million based on indicative valuation letters dated Mar 9 prepared by the company pending the finalisation of the full valuation reports and certification for the land.
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