PETALING JAYA (Nov 24): Damansara Realty Bhd (DBhd) has received approval from the Economic Planning Unit (EPU) on Nov 22 to acquire a 53.14-acre land in Johor for RM130.3 million from Johor Corporation (JCorp) as part of its proposed RM141.5 million settlement agreement with JCorp.
DBhd is an integrated facilities management, project management consultancy and property group.
“With the completion of the acquisition, DBhd has met almost all its obligations under the settlement agreement with JCorp, and will reduce the group’s net current liabilities by RM132 million.
“It will also mean a stronger balance sheet for DBhd, slashing our net current liability to RM23 million from RM155 million before,” said group CEO Brian Iskandar Zulkarim in a statement.
Located in Tebrau, Johor Bahru, the land is part of DBhd’s 63-acre integrated township Central Park that is being jointly developed with Hong Kong-listed Country Garden Holdings Co Ltd.
The project is located within Taman Damansara Aliff along the Pasir Gudang Highway.
With an estimated GDV of about RM3.5 billion, the township comprises residential homes, commercial shoplots and amenities which will be developed over the next six to eight years.
“DBhd will still own about 10 acres within Taman Damasara Aliff after Central Park is completed. With this landbank acquisition and the good progress on Central Park, DBhd is on track to strengthen its property development arm,” added Brian Iskandar.
The settlement comprises two acquisitions of land by DBhd from JCorp for RM141.5 million cash, and a land swap.
As part of its joint venture with Country Garden Malaysia, DBhd has already completed the payment of RM130.3 million of the total RM141.5 million settlement sum, leaving a balance of RM11.2 million to be paid.
“Aside from reducing our current liabilities, we are confident we are on track for a full year of profit,” added Brian Iskandar.
According to DBhd, the move is a key milestone in its transformation programme which has steered DBhd’s corporate recovery in 2017, and broken its two-year streak of losses with its first quarterly net profit earlier this year.
Meanwhile, DBhd has secured additional fund-raising capacity via a redeemable convertible notes (RCN) programme, together with a bonus issue of warrants.
The RCN issue, which was approved earlier this month, will give DBhd the ability to raise up to RM150 million, to fund the settlement and boost the group’s cash flow.
The RCN will also enable DBhd to raise working capital to strengthen its integrated facilities management and project management and consultancy segments, which are currently the main drivers of revenue growth.