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Tuesday, May 22, 2012

L&G unit gets RM7.8mil aid

PETALING JAYA: Land & General Bhd (L&G) is providing up to A$2.5mil (RM7.8mil) to its 50%-owned subsidiary Hidden Valley Australia Pty Ltd (HVA) within the next 12 months as financial assistance for a proposed retirement estate project in Melbourne.

The property investment and development firm told Bursa Malaysia recently that the proposed retirement estate consists of 298 residential units, built as standalone and duplex-style accommodation, with the average selling price at A$456,000 (RM1.42mil) per unit, which is expected to generate a project surplus of A$60.1mil (RM187mil).

HVA is in the midst of obtaining approvals from the Australian authorities to start the proposed project in the second half of this year.

The project, expected to be completed in March 2023, will be built in 10 stages. Each stage is expected to take 12 months.

The total gross development expenditure is estimated to be A$116.2mil (RM362.2mil), which primarily will be funded with bank borrowings and internal funds or collections from progress billings.

L&G said that due to current market sentiment, banks were only willing to extend facilities if there were similar commitments shown by shareholders.

“Therefore, the availability of the financial assistance is crucial during the early stages of the proposed project. Both joint-venture shareholders of HVA will provide advances proportionate to their respective shareholdings,” it said.

L&G has a 50% stake in HVA via wholly-owned subsidiary Land & General Australia (Holdings) Pty Ltd or LGAH, with the other half owned by HVA director Craig Williams.

L&G said the financial assistance was for working capital and preliminary expenses for costs including advertising and promotion, project consultancy and overheads.

The financial assistance for HVA is without any specific repayment timeframe or interest, and will be funded via L&G's internal funds.

L&G also said any additional financial assistance to be provided above A$2.5mil (RM7.8mil) would require L&G shareholders' approval once it exceeded 5% in aggregate.

The proposed retirement estate is part of the 2,500-acre Hidden Valley development.

According to the website, the development is a 50-minute drive to Melbourne's central business district via the Hume Highway. The attractions include an 18-hole golf course and a country club.

By The Star

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