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Saturday, July 17, 2010

Ivory Properties sees right time for listing

Penang-based Ivory Properties Group Bhd, which will soon be listed on the Main Market of Bursa Malaysia, believes the timing is right to go for the listing as the economy, especially the property sector, has picked up following economic stimulus measures by the Government in the past two years.

Datuk Low Eng Hock (left) and AmInvestment Bank Bhd MD T.C. Kok at the group’s prospectus launch early this week.

Chairman/group chief executive officer Datuk Low Eng Hock tells StarBizWeek that Ivory sees strong demand from home owners and investors in land-scarce Penang as well as discerning buyers with an eye for exclusive resort living, high capital appreciation and a prime location.

“We also noticed that in recent months, there have been quite a number of land acquisitions in Penang by big developers,” he says in an email reply. The group has so far undertaken a multitude of projects with a gross development value (GDV) of RM1.51bil.

“The GDV for completed property development projects accounted for about RM675.62mil while the GDV for ongoing property development projects is about RM834.09mil. The projects are scheduled for completion within the next few years,” he says, adding that the listing of Ivory will further enhance the group’s ability to complete property development projects and beef up its financial muscle to undertake bigger projects, both locally and abroad.

Ivory will be the first property development company to be listed on the Main Market this year.

The group launched its prospectus early this week where the balloting of the public issue shares is fixed on July 21 while its listing is scheduled for July 28.

July 19 will be the closing date for application of the public issue.

AmInvestment Bank Bhd has been appointed as the adviser, managing underwriter, underwriter and sole placement agent for the initial public offering (IPO).

Ivory’s IPO entails a public issue of 44.9 million new ordinary shares of 50sen each at an issue price of RM1 per share, comprising of 9.3 million new shares for application by the Malaysian public; 1million new shares by eligible directors, employees and business associates of Ivory and its subsidiaries; 34 million new shares for private placement to selected investors; and 570,000 new shares for Bumiputera investors approved by the Ministry of International Trade and Industry (MITI).

An additional 16.2 million shares at an offer price of RM1 per share will be offered to Bumiputera investors approved by MITI.

Of the gross proceeds, expected to be RM44.9mil, RM10mil will be used to repay bank borrowings, RM31.5mil for working capital and RM3.4mil for estimated share issue expenses.

“I am confident we should do well. Let’s see on July 28,” he says.

On the group’s property business in Penang, Low says being an island, Penang’s property prices will remain stable and this scarcity of land has somewhat shielded the property sector there from adverse effects of an economic slowdown, as had happened before.

“Our properties have appreciated over 40% within a few years and most of our upcoming projects are located in prime locations. We are overwhelmed with enquiries and have accepted registrations from prospective buyers for all the upcoming projects. We are also in the middle of acquiring new landbank in line with our expansion plan after the public listing,” he says, adding that the properties are priced between RM300 per sq ft and RM500 per sq ft.

The Ivory group is a fast emerging developer with a humble beginning. It was established in 1999 to undertake medium to high end property development projects.

It had completed property development projects such as The View Twin Towers (condominiums) in Batu Uban; Tanjung Park (condominium and townhouse) and Seri Taman Tanjung (apartments) in Tanjung Tokong; Plaza Ivory (condominiums, commercial shop lots and retail) and Palace Hill (bungalows and semi-detached houses) in Bukit Gambir; and Penang Times Square’s Phase 1, Birch The Plaza (condominiums and shopping complex) in George Town (Dato’ Keramat).

The group’s ongoing property development projects are the exclusive Moonlight Bay comprising villas and condo-villas in Batu Feringgi with a GDV of about RM189.96mil; Penang Times Square’s Phase 2, Birch Regency comprising condominiums and shopping complex at Jalan Dato’ Keramat with a GDV of approximately RM307.41mil; Zen @ The View comprising bungalows at Batu Uban with a GDV of approximately RM15.32mil; Island Resort’s Phase 2 and Phase 3 comprising condominiums, resort villas and bungalows at Batu Feringgi with GDV of about RM259.03mil and Aston Villa’s Phase 2 and Phase 4 comprising landed residential and shop lot in Bukit Mertajam with a GDV of approximately RM62.36mil.

Future property development projects of Ivory in Penang are Penang Times Square’s Phase 3 and Phase 4 with a GDV of approximately RM624.88mil; Mount Erskine Development comprising The Peak Residences with a GDV of approximately RM221.89mil, Taman Bukit Erskine with a GDV of approximately RM42.30mil, The Latitude with a GDV of approximately RM117.46mil, commercial lots with a GDV of approximately RM34.86mil at Mount Erskine; City Mall with a GDV of approximately RM269.61mil at Jalan Tanjung Tokong; Island Resort’s Phase 4 with a GDV of approximately RM121.15mil; and Aston Villa’s Phase 1 and Phase 3 with a GDV of approximately RM47.66 mil.

Ivory’s project in Tanjung Malim, Perak comprises Ivory Eco Park @ Tanjung Malim with a GDV of approximately RM420mil. On the outlook of the property market this year, Low says he is very optimistic, not only on the Penang market but Malaysia in general.

“With many positive and investor-friendly policies by the Government and healthy growth in our domestic economy, I believe we are on the uptrend. We at Ivory are all gearing up to take up every opportunity in this optimistic property market,” he says.

On plans to venture into the Klang Valley property market, Low says Ivory is studying several parcels of land in the Klang Valley and is looking at joint development with a local partner in the Klang Valley.

Ivory had recorded historical proforma consolidated profit after taxation (PAT) of about RM10mil, RM22.5mil, RM26.5mil, RM26.87 mil and RM17.17mil for its financial years ended Dec 31 (FY) 2005, FY 2006, FY2007, FY2008 and FY2009 respectively.

The company is forecasting a proforma consolidated PAT of approximately RM33.86mil for the financial year ending Dec 31, 2010.

By The Star

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