MRCB bids for CBSB

KUALA LUMPUR: Malaysian Resources Corporation Bhd (MRCB) has proposed to acquire an 18% stake in Cosy Bonanza Sdn Bhd (CBSB) and 2.48 million redeemable preference shares (RPS) as well as 3.77 million RPS-A in CBSB from Kuwait Finance House (Malaysia) Bhd (KFH) for RM7.77 million.

In a Bursa Malaysia filing on Thursday, Dec 30, the group said it had entered into a KFH Musyarakah buy-out agreement with KFH and Quill Sentral Sdn Bhd in relation to the acquisition.

MRCB said the purchase consideration will be paid on or before the completion date of Dec 31.

KFH had delivered the share certificate and all other documents related to the transfer of the sale shares to MRCB on Thursday in exchange for the consideration paid by the latter on Dec 29, rendering CBSB a subsidiary of MRCB.

CBSB is a property development company and is the legal owner of a 7,503-acre land in KL Sentral known as Lot B, which has been approved for development of an office tower with a total gross floor area (GFA) of 1.5 million sq ft (sf) and an estimated gross development value (GDV) of over RM1 billion.

As at Dec 31, 2009, the net book value of Lot B was RM133 million.

MRCB said the purchase consideration, which represents a premium of RM1.5 million over the cost of the sale shares was determined on a willing buyer-willing-seller basis considering the prevailing market value of the land without development and CBSB’s prospects.

The group added that as CBSB’s holding company, it will have significant control over its management and operations and will stand to fully benefit from all future revenues and profits.

"With the anticipation of official sales launch in early 2011, the board believes that the acquisition represents a good opportunity to further strengthen the future income of the MRCB group," it said.

The group will fund the purchase through cash raised in its rights issue in March.