KUALA LUMPUR (Oct 23): Milux Corp Bhd, which announced its property diversification last week, said yesterday its maiden property development in Pahang has been revised to five condominium blocks with retail and club facilities, instead of the six blocks that were originally planned.
In its filing with Bursa Malaysia, the home appliance maker said the estimated gross development value of the project is RM2.13 billion, while its gross development cost (GDC) is estimated at RM1.05 billion.
Last week, Milux announced it was partnering with RGF Cabaran Sdn Bhd (RCSB) to jointly develop 12 pieces of land measuring 25,832.31 sq m in Bentong, Pahang, into a residential property consisting of condominiums.
Milux also said then its wholly-owned subsidiary, Milux Properties Sdn Bhd (MPSB), had entered into a joint-venture (JV) cum shareholders’ agreement (JVSHA) with RCSB to form a JV company called Phoenix Pentagon Sdn Bhd to undertake the proposed project called Pentagon Genting Highlands.
MPSB would have a 60% stake in the JV company, while RCSB would take up the rest. RGF Land Sdn Bhd, being the holding company of RCSB, is the beneficiary and registered owner of the lands. RGF Land is also a major shareholder of Milux, with a 13.78% stake.
The JVSHA is conditional upon, among others, the lawful assignment of the project management agreement (PMA) by RCSB to Phoenix Pentagon, within three months from the date of the JVSHA.
On Monday, Milux told the exchange that the development would consist of six condominium blocks, with construction expected to begin in June 2017 and to be completed in December 2020.
Yesterday, Milux said the fees payable to Phoenix Pentagon pursuant to the PMA will be based on 2% of the estimated GDC of RM874 million.
Milux said the fees payable excludes provisional sums and expenses in relation to the transfer of individual/strata titles to the purchasers, which do not fall within the scope of responsibility of Phoenix Pentagon under the PMA.
Milux decided to venture into property segment due to an increasingly competitive market in the household appliances industry, with the hope that the new venture will generate additional income to the group.
Shares in Milux closed unchanged at 92 sen yesterday, for a market capitalisation of RM50.06 million.
This article first appeared in The Edge Financial Daily, on Oct 23, 2015. Subscribe to The Edge Financial Daily here.