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Tuesday, December 22, 2009

MRCB makes approach to buy federal land

Malaysian Resources Corp Bhd (MRCB) has made an informal approach to buy or help develop thousands of acres of federal land in the Klang Valley.

But its recently-appointed chief executive officer Mohamed Razeek Hussain stressed that no formal bid has been submitted.

"We have expressed our interest. It's up to the government to whom it wants to allocate the land," Razeek said in response to whether MRCB had made a bid to the government for prime land in two areas.

He was speaking after MRCB's extraordinary general meeting on its proposed rights issue in Kuala Lumpur yesterday.
The government recently announced plans to sell or co-develop its prized landbank in Cheras, Kuala Lumpur and Sungai Buloh in Selangor.

During Budget 2010, it singled out a 100 acres in Jalan Cochrane near Maluri in Cheras (market rate of RM100-RM150 per sq ft) and 2,000 acres at Rubber Research Institute of Malaysia in Sungai Buloh.

The latter land is sited near an industry park in Kota Damansara, with an estimated market rate of RM30 per sq ft.

Razeek said MRCB is keen on increasing its landbank to turn it into mixed development projects.

MRCB, he said, is unlikely to make any cash call in the next five years after its proposed renounceable one-for-two rights issue.

Shareholders yesterday gave their nod on the exercise that will raise gross proceeds of between RM508 million and RM541 million.

"(With money from the rights issue,) we will have sufficient fund to participate in future projects especially in the construction sector.

"It also puts us in a good stead to move forward," Razeek said.

He added that the company's performance should be better this year and beyond than in 2008 on the back of various ongoing and new projects.

Meanwhile, the rights issue at RM1.12 a share will raise MRCB's share capital to between 1.36 billion and 1.44 billion from the present 907.62 million shares.

Proceeds will be used to fund expansion into environmental engineering and infrastructure business, acquisition of prime land for property development, as well as for MRCB's 51 per cent equity investment in Nu Sentral Sdn Bhd.

The latter company is a joint venture with Pelaburan Hartanah Bhd to acquire and manage a seven-storey retail mall called Nu Sentral at KL Sentral.

MRCB said its gearing level will ease to as low as 1.2 times from 2.5 times now after the completion of the rights issue.

As at end-September this year, it has total borrowings of RM1.6 billion.

By Business Times (by Zuraimi Abdullah)

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