MRCB set to buy strategic land

PETALING JAYA: The completion of Malaysian Resources Corp Bhd’s (MRCB) rights issue by the middle of next month will pave the way for the company to acquire some parcels of strategic land owned by the Federal Government in the Klang Valley, according to industry observers.

“It is a prelude to strategic land deals, which involve substantial amounts of money,” an analyst said. “And if the deals (go) through, it will be a boost to MRCB’s plan to be an integrated property developer.”

It is understood that MRCB’s management recently reiterated its intention to acquire several plots of such land in the Klang Valley, including a 60-ha parcel in Jalan Cochrane and 8-12ha at Ampang Hilir.

But analysts believe there are more to it than that, specifically highlighting the much sought-after 1,360-ha plot belonging to the Rubber Research Institute of Malaysia in Sungai Buloh as well as some pockets of land within the KL Sentral and Brickfields area.

At the company EGM last month, chief executive officer Mohamed Razeek Hussain said the company’s one-for-two rights issue at RM1.12 per share, was to raise funds for business expansion in line with the global economic recovery.

He said the bulk of the proceeds raised, which could total between RM508mil and RM541mil, would be used to increase its landbank, particularly in the Klang Valley, for commercial and residential developments.

Industry observers believe the award of the Federal land deals will only be finalised in June during the tabling of the 10th Malaysia Plan.

The Government is said to be very tight-lipped about the land deals, with MRCB quoted as saying that it was up to it to decide on which company to award those land deals to.

It is believed that several government-linked corporations have also been contending for those land deals.

Nevertheless, analysts believe MRCB stands a good chance of clinching most of the significant land deals that it has bid, simply because the company has strong backing from the Employees Provident Fund (EPF), which is its largest shareholder with a 30.6% stake.

MRCB chief financial officer Chong Chin Ann confirmed last month that EPF had taken up its 130 million rights shares for more than RM150mil.

This has further reinforced market belief that MRCB remains the front-runner in the Federal land deals because industry observers believe those potential land deals are important to EPF, which is an active property player and financier.

“Another thing going for MRCB is that the (parcels of) land are somewhat viewed as the company’s territory,” an analyst said, particularly referring to the KL Sentral area, where MRCB is one of the major developers of the integrated township.

By The Star