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Thursday, September 3, 2009

AMDB set to become a focused entity

The diversified group is close to finalising its divestment of non-core assets and will focus on property, engineering and infrastructure

Diversified AMDB Bhd expects to complete its transformation into a focused entity specialising in property, engineering and infrastructure operations before the end of the month.

Its chief executive officer Ben Lee Keen Pong said upon completion, the group will emerge as a financially stronger entity with a cleaner balance sheet, larger asset base and increased earnings visibility.

"We are close to finalise the divestment of non-core assets - namely the Seri Melayu Restaurant operations, Harper Travel and Tours as well as our stake in advertising agency J. Walter Thompson Sdn Bhd - to our parent, Amcorp Group Bhd, for RM22.1 million," he said.

In strengthening its position in the property sector, AMDB has bought four property development companies from Amcorp via a debt-to-equity swap.
Lee said the group paid RM159.72 million in cash and new shares for its interest in Amcorp Prima Realty Sdn Bhd, Regal Genius Sdn Bhd and Distrepark Sdn Bhd.

As for a 60 per cent stake in the HDC-Amcorp joint venture, AMDB paid RM20.99 million.

"The acquisitions will enable us to further expand our property segment and involve in the acquisition of ongoing projects namely the 75.2ha bungalow enclave Kayangan Heights in Shah Alam, Selangor, and the 285ha Sibu Jaya township in Sabah," he said, noting that the company currently has an order book valued over RM1 billion.

Last May, shareholders approved the company's three-pronged business reorganisation strategy involving a capital reconstruction, sale of certain non-core businesses and the purchase of land.

Lee said the move will help AMDB write off its accumulated losses of RM356.55 million and allow the group to expand its property development business, one of its main drivers aside from engineering and infrastructure work.

AMDB's revenue for the year to March 31 2009 fell 45 per cent to RM206.8 million from a year ago. This was due to the sale of a development land in Pulau Indah, Selangor, worth RM130 million and lower volume in the property, engineering and infrastructure divisions.

Despite that, AMDB managed to return to a RM18.5 million profit from a loss of RM14.2 million previously, thanks to the gains from the RM18.3 million sale of Sebana Group.

AMDB's gearing is also lower at 0.19 times from 0.49 times before due to the net proceeds of the Sebana sale and the fact that it doesn't have to account for Sebana's borrowings.

"With lower gearing, the group's finance costs during the financial year were lower at RM10.4 million compared with RM18.2 million before," he said.

By Business Times (by Azlan Abu Bakar)

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