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Monday, February 25, 2008

UEM Land to raise RM875m

UEM Land Sdn Bhd is looking to raise RM875 million through a five-year syndicated term loan facility to finance its projects at Nusajaya in Johor, its top executive said.

The soon-to-be-listed property unit of UEM World Bhd is the master developer of Nusajaya, Malaysia's biggest property project.

"We're going to the market to seek some funding for working capital requirements," managing director Wan Abdullah Wan Ibrahim told Business Times in an interview.

Senior general manager of finance, Mohd Zakir Omar, said the company is in the midst of arranging a syndicated term loan from a consortium of banks.

"At the moment about six (banks) have expressed interest, most of them local. It's just a short -term financing, we're looking at a period of maximum five years," he said.

The funds would mainly be for UEM Land's projects that are already in the market and new ones that will be launched in the next one or two years, he added.

Wan Abdullah expects to be able to secure the loan "very soon".

UEM Land is working on various projects covering about 1,619ha of its landbank in Nusajaya. Some of these will take about four years to complete while the longer-term ones will take about 10 years, he said.

"There's also another 2,428ha, some of which we already have plans for, which will be put in the market over the next five to 10 years," said Mohd Zakir.

This includes the Horizon Hills project, a resort development covering 486ha which should be completed in about 10 years.

While UEM Land's focus is predominantly on Nusajaya, it is also looking to buy some properties in Selangor and Penang, possibly on a joint-venture basis with institutions that own land, said Wan Ibrahim.

The company has no immediate plans to go abroad, but is keeping a keen eye on potential projects it can undertake, especially in the Middle East.

"We have an active international business division looking for business opportunities, but I think the timing is not quite right for UEM to spend so much time out there. There is just too much at stake in Nusajaya. We have to do that well," Wan Abdullah remarked.

He said UEM Land may perhaps be able to establish a good overseas project sometime in 2010.

Meanwhile, the company is in various stages of discussion with potential joint-venture foreign partners for further development at Nusajaya. These include developers from the Middle East, Australia and East Asia.

"In terms of strategic partners, I think before the end of this year, we can see two (foreign) partners coming," he said.

The company also expects to be able to announce a tie-up with a local partner, to develop Puteri Harbour, in the second quarter of this year, he added.

UEM Land already has tie-ups with a few partners, such as Limitless LLC, a unit of Dubai World, to build waterfront homes in Puteri Harbour; and with Gamuda Bhd for development of Horizon Hills.

By New Straits Times - Business Times (by Adeline Paul Raj)

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