KUALA LUMPUR (Nov 26): Malaysian Resources Corp Bhd (MRCB) said it had received the settlement sum of RM1.325 billion from the Malaysian government on the termination of its concession for the Eastern Dispersal Link Expressway (EDL).
In a statement yesterday, MRCB said the sum had been received via its wholly-owned unit MRCB Lingkaran Selatan Sdn Bhd.
“We would like to thank the government of Malaysia for the speedy conclusion of negotiations and the payment of [the] RM1.325 billion settlement sum, which considerably strengthens the company’s balance sheet. This payment is a significant event as it marks the end of the non-core asset rationalisation programme in connection with MRCB’s corporate transformation,” said MRCB group chief financial officer Ann Wan Tee.
The group said the sum received will immediately reduce its net gearing from 0.71 times to 0.46 times.
“Net gearing is expected to fall significantly further to 0.22 times after the completion of [the] 80% disposal of MRCB’s 76.14 acres (30.81ha) of land in Bukit Jalil to the EPF (Employees Provident Fund), which is expected to be completed by the end of the year,” MRCB said.
On May 31 last year, MRCB announced that it was partnering the EPF to develop the land, which has a potential gross development value of RM20.67 billion over a 20-year period beginning 2019. The EPF would take up 80% of MRCB’s unit Rukun Juang Sdn Bhd for a stake in the land for RM421 million.
The vacant land is to be awarded to Rukun Juang as payment in exchange for its involvement in the project to refurbish and upgrade the National Sports Complex in Bukit Jalil at a cost of RM1.34 billion.
MRCB shares closed three sen or 4.11% lower at 70 sen last Friday, with a market capitalisation of RM3.08 billion. Year to date, the stock has fallen 40% from RM1.16 on Jan 2.
This article first appeared in The Edge Financial Daily, on Nov 26, 2018.