The projects would be launched in the coming months amid the recovery in the economy after a dry spell in terms of new launches in the second half of 2008 and part of 2009, he said.
“We have RM4bil worth of sales to be launched but to do this, we need working capital, especially when it is a condominium. Even if we sell 10%, we still have to construct the rest,” Chan said after the company AGM and EGM yesterday.
The property developer will raise its working capital internally by disposing of stocks and non-strategic landbanks to raise RM300mil.
The remaining RM200mil will be raised via a 1-for-2 rights issue which is expected to be completed by November, according to Chan.
The group plans next month to launch its Seri Tanjung Pinang condominium on Penang island, which has a gross development value (GDV) of RM2bil.
In the Klang Valley, it will this weekend open for sale Phase 2 of its St Mary Residences, or Tower A, which has a GDV of RM750mil.
It has also marked up considerably the price of this phase by 25% to RM1,250 per sq ft.
Chan justified this by saying the new phase would be completely fitted out, unlike the previous phase which only had kitchen fittings.
“Phase 2 will come with lighting, right down to wardrobe and curtain railings. To make it easier for buyers, they do not need to pay for loan documentation, unlike the first phase,” he said.
E&O is also preparing to launch its Jalan Conlay condominium, another project at Jalan Yap Kwan Seng as well as an office tower development which forms part of the St Mary project.
The company aims to sell at least 20% of St Mary Residences Phase 2 to foreigners and is currently on a sales campaign in Singapore, Hong Kong and Guangdong, China.
Chan said the company, like any other property development company, needed two years to realise profit. “A profit in 2008 is due to sales in 2006,” he said, adding that the group would, therefore, have to keep the momentum going.
E&O suffered a net loss of RM31.7mil for its 2009 financial year compared with a net profit of RM128.5mil in the previous year.
Chan said the company had a current gearing of 0.79 which would be reduced to 0.46 with the rights issue. This could be further reduced to 0.16 with RM300mil to be raised via the disposal of stocks and non-strategic landbanks, he added. The property developer has total borrowings of nearly RM900mil.
By The Star
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