KUALA LUMPUR: Property developer Talam Corp Bhd is on track to emerge from its PN17 status, even as its debt regularisation plan was being delayed by prolonged negotiations on assets disposal, said its executive director Chua Kim Lan.
“At the moment, we are finalising two sale and purchase agreements (SPAs) involving the sale of land and building that were expected to be completed earlier but were delayed due to the year-end break. Once completed, the proceeds would be used to pay off the outstanding defaulted loans.
“But there should be no more further delays now after the holiday season, and our merchant bankers will submit the application to Bursa Malaysia for the uplifting of the PN17 status once the agreements are signed,” Chua told The Edge Financial Daily recently.
Talam had previously said it was hoping to emerge from its PN17 status by end of last year, following the completion of its financial regularisation plan. The loan total defaulted by the company stood at RM227 million as of Nov 30 last year.
On the RM391 million owing to Selangor state agencies, Chua said the process of offsetting the outstanding loans via disposal of properties, mainly land, was ongoing. The state government recently announced that it was stepping up efforts to recover outstanding monies owed to the state by the private sector.
“In fact, the land that was charged for the loans is now worth much more and the surplus would be used to repay the company’s outstanding debts, which currently stand at around RM600 million,” she said.
Chua says Talam will focus on completing its outstanding projects with the target of achieving at least 90% completion rate this year.Most of the debts stemmed from failed joint real estate development ventures on land belonging to state agencies, such as subsidiaries of Selangor Development Corp, Kumpulan Darul Ehsan Bhd, Permodalan Negeri Selangor Bhd and Yayasan Pendidikan Selangor.
Chua said Talam still had sufficient landbank for future projects even after the completion of its divestment plan.
Talam is looking at disposing of about 3,000 acres (1,214ha) of land from its current landbank of 7,000 acres. The largest tract of land to be disposed of would come from the company’s Bandar Bukit Beruntung development.
For its third quarter ended Oct 31, 2009 Talam posted a net profit of RM118,000, down from RM8.24 million for the corresponding period in 2008. However, the group’s revenue jumped to RM74.72 million from RM50.28 million previously, sustained by projects that were progressing well.
Going forward, Chua said Talam would focus on completing its outstanding projects with the target of achieving at least 90% completion rate this year.
“Our main joint-venture partner IJM Corp Bhd has also completed the Puncak Jalil project with over 3,000 units of houses sold,” said Chua.
She added that there would be no new property launches by Talam this year, but it could start some of its joint-venture projects such as Sierra Ukay, Sierra Selayang and Ukay Perdana.
These projects have a combined gross development value of more than RM1.4 billion.
This article appeared in The Edge Financial Daily, Jan 11, 2010.
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