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Friday, November 18, 2011

BRDB denies rumours it has called off disposal of prime assets

PETALING JAYA: Bandar Raya Developments Bhd (BRDB) is still deliberating the sale of its prime assets and denied that it had called off the deal, the company said in an emailed reply to StarBiz.

BRDB was asked by StarBiz to comment on rumours that it was going to call off the sale. “The matter is still being deliberated by our board of directors. We will make an appropriate announcement once details have been confirmed,” a company official said in the email.

Industry players have also said that no appointment had been made yet by BRDB of any independent international property valuation firm to manage the tender for the sale, something that the company said it would do. BRDB didn't reply to a previous question on this issue.

BRDB had first said in September that it had accepted an offer (subject to shareholders' approval) by major shareholder Ambang Sehati Sdn Bhd to buy its main assets, comprising the Bangsar Shopping Centre (BSC), Menara BRDB, CapSquare Retail Centre and Permas Jusco Mall for RM914mil.

Following the proposed disposal, the board had intended to pay a special dividend of 80 sen net per share, or RM390mil. The deal would have seen BRDB netting RM430mil in cash and the repayment of RM430mil in borrowings and dividends from BR Property to BRDB.

Ambang Sehati, which owns 18.8% in BRDB, is a private vehicle of Datuk Mohamed Moiz Jabir Mohamed Ali Moiz, who is chairman of the property firm.

However, since then, there had been calls for BRDB to dispose of the assets via a tender to get a better price and appease disgruntled shareholders, to which the property firm had agreed.

The Minority Shareholder Watchdog Group has commented that the open tender and appointment of an independent international property valuation firm would “allow time and independence as well as professionalism to this exercise, which is positive in terms of governance.”

An analyst said it would bode well for BRDB if it were to call off the sale as its assets had growth potential.

“The Bangsar Shopping Centre has stood the test of time and continues to generate stable recurring income. It is also situated in a strategic location and is popular among expatriates and discerning shoppers,” he said.

AmResearch, in its report after the announcement of the sale, estimated the four properties will contribute between 20% and 25% to BRDB's earnings before interest and tax in 2012 and 2013.

On a separate note, an industry source said BRDB is bidding for the proposed development of 20 acres of prime land in Bangsar that used to house Lever Brothers' soap and margarine manufacturing plant.

The land had been left unoccupied since Unilever Malaysia moved out in 2003.

By The Star

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