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Monday, October 22, 2007

Bolton set to regain its former glory

By The Star

Bolton Bhd is targeting to achieve total gross development value (GDV) of RM5bil (GDV) in the next two years, via land acquisitions and joint ventures.

Currently the property developer has on going projects worth GDV RM674mil.

Executive chairman Datuk Mohamed Azman Yahya said Bolton expects to build up its GDV by another RM2.345bil in the next 24 months.

“We are ready to move into fifth gear as a full-fledged property developer,” he told StarBiz recently.

In 2005, the former head of national asset management company Danaharta Nasional Bhd, accepted the invitation of the Lim family (then Bolton's majority shareholder) to consolidate Bolton's resources and to impact the company positively in the interest of stakeholders.

As a result, Azman emerged as Bolton's executive chairman and the single largest individual shareholder with a 16.3% equity stake.

Under his stewardship, Bolton had embarked on a course to reposition the company back to its former glory as a premier property developer in Malaysia.

Azman said for the past 1½ years Bolton had been adhering to an execution map, which entailed:

Chan Wing Kwong (left) and Datuk Mohamed Azman Yahya

  • Cleaning up the balance sheet and reducing gearing
  • Setting up a more efficient resource and capital management system
  • Disposing non-core assets
  • Increasing the number of proposed projects.
  • Streamlining Bolton's board and making it more professionally run
  • Improving investor relations

The results of Bolton's efforts can be seen in the company's latest audited financial report.

For Bolton's financial year ended March 31, 2007 (FY07) the company posted RM63.62 mil net profit compared with a net loss of RM216.3mil previously.

In the process of consolidating the company it generated RM133mil cash from its operating and investment activities, which included the disposal of some properties that were non-core and low yielding assets worth RM318.5mil

Some of the assets disposed were Hotel Midah (RM26mil), Prince Kaswira (RM2.5mil), D'Mayang (3.5mil), Rampai-Niaga (RM80mil) and M-Plant shares (RM79.7mil).

The company also conducted several share-buy-back exercises since FY04 including one in Sept 30, FY07 for 13.376 million shares at 87 sen and made an unrealised gain of RM4.7mil (based on closing price RM1.23).

Moreover, Bolton pared down its borrowings from a high of RM523mil in September 2006 to RM289mil in March this year.

Azman said the restructuring exercise was at the tail end and the company was ready to be more aggressive in the market again.

There are still some assets to be disposed off such as Symphony House Bhd, Langkawi Fair and Campbell Complex, which was one of Bolton's earlier properties.

“Some people might be sentimental about selling assets like Campbell Complex but I'm not,” he said, adding that it was important to remain focussed and objective in the interest of shareholder value creation.

Azman said Bolton now had a decent land bank of about 900 acres and a good team that could deliver the targets set.

Asked what were Bolton's plans going forward, he said the company would initially look at developing several high-end projects using its existing land sited mainly in the Klang Valley.

“There's still a lot that we can do to enhance our existing and on-going properties projects,” he said, adding that the company also wanted to have more projects.

Bolton chief operating officer Chan Wing Kwong said some of the on-going projects were Tijani in Bukit Tinggi, Taman Tasik Prima in Puchong under a joint venture, and mixed development projects Lavender Heights in Senawang, and Bandar Amanjaya in Sungai Petani.

He said other upcoming property development projects include Mayang near KLCC (GDV RM1bil), The Surin in Penang (GDV RM150mil) and Bolton Court in Kuala Lumpur (GDV RM85mil).

Chan pointed out that Bolton's turnaround phase was almost completed and the company planned to focus purely on property development.

Asked if Bolton would stick solely to property development in Malaysia, he said while the bulk of property development projects were still in the country the company would want to look at those within the region and beyond.

“We feel there are still opportunities here for good property developers but Bolton would not want to depend on one market. But we are constantly on the look out for commercially viable property projects overseas,” he said.

On Dubai Investment Group's (DIG) recent acquisition of 20 million shares for a 6.5% stake in Bolton, Chan said it reflected DIG’s confidence that Bolton would be a strong property developer in time.

DIG, which has extended its scope of business from managing infrastructure and capital projects within Dubai to investing in international stocks and real estate, is the financial and global real estate arm of conglomerate Dubai Holding.

“We are please that DIG can see the value in Bolton,” he said, adding that the strategic alliance could bring about other opportunities.

Bolton would like to have more quality institutional investors like DIG to further strengthen the company as a leading property developer locally and possibly abroad in time.

Projects in the pipeline

  • Kejora Harta Bhd privatisation

  • A 688-acre high-end residential project on 4.3 acre freehold near Jalan Mayang near KLCC in Kuala Lumpur

  • Redevelopment of 100 high rise condominium units (Bolton Court) on one acre freehold land in Jalan Ceylon in Kuala Lumpur

  • Buyout of minority shareholders in BCom Holdings Bhd and Kenneison Brothers Sdn Bhd

  • Acquisition of 3.4 acres of ready development land in Tanjung Bungah, Penang (The Surin) for the development of 396 units of sea-view condos.

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