MRCB upbeat on outlook

KUALA LUMPUR: Malaysian Resources Corporation Bhd (MRCB) is looking forward to better years ahead, given the progress of its ongoing projects and its more robust financial position, said CEO Mohamed Razeek Hussain.

He said the group’s financial position would be stable after the completion of its rights issue in mid-February 2010 that was expected to raise between RM508 million and RM541 million.

“The rights issue constitutes one of the key steps by MRCB to raise funds without incurring interest expenses and to strengthen its balance sheet,” he told reporters on Dec 21, after the group’s EGM in which shareholders approved its proposed a one-for-two rights issue at RM1.12 a share.

Mohamed Razeek said the rights proceeds would be used for capital expenditure in relation to future business expansion, property investments in Kuala Lumpur Sentral and working capital purposes.

MRCB is undertaking a RM2.14 billion mixed development within the Kuala Lumpur Sentral (KL Sentral) enclave, which is known as “Lot G Integrated Development” comprising a seven-storey retail mall named Nu Sentral, three office towers and a hotel with a total gross floor area of about 2.6 million sq ft.

The group would use RM85 million of the proceeds for equity investments in its 51%-owned Nu Sentral mall, a joint-venture between MRCB and Pelaburan Hartanah Bhd, slated for completion in 2012.

Meanwhile, MRCB chief financial officer Chong Chin Ann said the Employees Provident Fund (EPF) had taken up its 130 million rights shares.

Mohamed Razeek said based on the audited accounts as at Dec 31, 2008, the group’s gearing level would decline from 2.5 times to between 1.4 times and 1.2 times following the completion of the rights issue exercise.

He said the exercise would increase MRCB’s share capital from 907.625 million shares to between 1.36 billion and 1.44 billion shares.

He said the group’s total borrowings as at Sept 30, 2009 was RM1.6 billion which included a long-term sukuk of RM828 million raised solely for the 8km Eastern Dispersal Link, a highway that links the customs, immigration and quarantine complex in Johor Bahru to the PLUS North-South Expressway.

Asked about the possibility of MRCB being granted the two federal-owned land in Jalan Ampang Hilir and Jalan Cochrane, Mohamed Razeek said it was up to the government to decide which company to develop the land.