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Saturday, October 4, 2008

SIHB to buy Welcome Properties

Supportive International Holdings Bhd (SIHB) has proposed to acquire Welcome Properties Sdn Bhd for RM10 million.

The acquisition will be financed by internally-generated funds and from bank borrowings, if necessary, SIHB said in a filing to Bursa Malaysia.

The proposed acquisition represents SIHB's commitment to meet increased expectations for long-term growth and sustainability through diversification into property development.

It said the board envisages the acquisition will contribute positively to SIHB’s future earnings, arising from the Aman Bayu project, with an expected profit of some RM60 million.

Welcome Properties owns more than 19.2 hectares of freehold sea-facing land at Teluk Air Tawar, Butterworth, with a net book value of about RM35.1 million as at December 31, 2007.

The company is now undertaking a two-phase mixed development, called

“Projek Aman Bayu”, comprising residential and commercial components on the said land.

The total gross development value for the project is about RM360 million while the gross development cost is about RM253 million.

Expected profit is about RM60 million.

The project development cost is funded by a RM22 million term loan undertaken by Welcome Properties.

The first phase has already commenced and is expected to be completed by the end of next year. Development of the second phase is slated to start in mid-2009 and due for completion in 2010.

By Bernama

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