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Tuesday, September 30, 2008

EPF to invest in WCT project

COMMERCIAL DEVELOPMENT: Artist’s impression of The Paradigm. — WCT website

The Employees Provident Fund (EPF), a cash-rich retirement savings fund, plans to invest almost half a billion ringgit in a commercial project in Petaling Jaya, a deal that sees it tying up with WCT Bhd, a construction and property group.

The EPF is also a substantial shareholder in WCT, holding 17.22 per cent.

The tie-up also comes as the cost of borrowing money in the capital markets has risen. A weak stock market makes it difficult for companies to raise funds.

"(The deal) provides an opportunity for WCT to raise funds for the general working capital requirements of the WCT group and to finance viable property development projects that may arise in the future," WCT said.

Under the deal, WCT will sell 30 per cent of Jelas Puri Sdn Bhd (JPSB), the company that will develop the RM1.06 billion project, to the EPF for RM87.36 million cash. This is due to be completed in 2011.

JPSB will also issue five-year redeemable secured loan stocks worth some RM390 million to the EPF. The loan stocks carry interest of six per cent a year.

The bulk of the loan stocks, or RM320 million, will be issued in the first quarter of 2011, and the rest in the fourth quarter of the same year.

JPSB is developing "The Paradigm", WCT's first high-rise commercial project in Petaling Jaya.

Last year, the local authorities approved the revised plan for the project. It will feature four blocks of 25- to 33-storey office buildings, one block of 15-storey office suites, one block of 20-storey office suites and a six-storey shopping complex.

However, JPSB is preparing a new application to revise plans for the shopping centre and the four blocks of 27- to 33-storey office buildings, WCT said.

The project has a gross development cost of RM1.06 billion, and JPSB has spent some RM107 million to date.

Shares of WCT on Bursa Malaysia closed unchanged at RM2.53 yesterday.

By New Straits Times (by Shahriman Johari)

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