Selangor Dredging to acquire three pieces of land for RM80 mil

KUALA LUMPUR (April 13): Selangor Dredging Bhd (SDB) is buying three pieces of freehold land in Serdang for RM80 million, which it plans to develop into a low to high-rise residential development.

In a filing with the exchange today, SDB said its wholly owned subsidiary Hayat Abadi Sdn Bhd entered into an agreement today with SM Fortuneville Sdn Bhd (SFSB) to effect the purchase.

SDB said the lands have development potential and are part of the group’s ongoing identification of suitable properties to add to the group’s landbank.

“Hayat Abadi is proposing to develop the area into low to high-rise residential development. The total development costs and the expected profits to be derived from the development of the lands have yet to be ascertained at this juncture as the detailed amended development plan has yet to be finalised,” said SDB.

The lands are currently being developed by SFSB as a gated strata development, comprising 63 bungalow units and 36 semi-detached houses, known as the Casona Luxury Homes.

SFSB has commenced earthworks, piling works and erected two units of bungalows, two units of semi-detached houses and one management office on the lands.

It has already sold fifteen units of three-storey bungalows and nine units of semi-detached houses to end purchasers.

“SFSB will cease further sale of properties in the project and work on the said lands as from the date of the agreement and revocation of the sale and purchase agreements entered into between SFSB and its end purchasers will be carried out by SFSB,” said SDB.

It is, however, unable to disclose SFSB’s original cost of investment, date of investment and net book value of the said lands as it is not privy to such information.

Meanwhile, it intends to fund the land buy using internally generated funds, bank borrowings and completed unit of properties developed by SDB, while the development of the lands will be financed by a combination of internal funds and borrowings.

Post-acquisition, the group said its gearing ratio will increase by 2.83% to 37.64%.

“The consolidated earnings and earnings per share will be increased by RM5.15 million and 1.2 sen respectively for the financial year ending March 31, 2016, of the SDB group, arising from the profit of completed unit of properties set off against balance purchase consideration,” it added.

It expects the acquisition to be completed by end-November 2015.