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Saturday, August 11, 2012

Dijaya ‘naturally’ interested in land

PETALING JAYA: Dijaya Corp Bhd managing director Datuk Tong Kien Onn said it would be natural for Dijaya Corp to want to participate in tendering for parts of the Rubber Research Institute of Malaysia's (RRIM) land in Sungai Buloh as its Tropicana Golf and Country Club wraps around the RRIM land.

“We wrap around a major part of their land. There are many strategic advantages and synergies to be derived.

“In terms of accessibility and pricing point, it would make a lot of sense to develop next to an established development,” said Tong.

StarBizWeek reported last week that the EPF and Dijaya were in talks to jointly develop certain parcels of the land in Sungai Buloh.

EPF subsidiary Kwasa Land Sdn Bhd, had on Monday refuted the report saying that no developers had been selected as partners for the RRIM development yet. Kwasa is the master developer.

The RRIM land, which begins from the Sungai Buloh My Rapid Transit depot in the north and ends with its southern portion bordering the Tropicana Golf and Country Resort, belongs to Dijaya.

It is learnt that Kwasa would be calling for bids for the RRIM land in Sungai Buloh by year-end.

Meanwhile, shareholders gave their approval to Dijaya's proposed amalgation exercise to streamline and rationalise the majority of the lands and properties held privately by Dijaya's chief executive officer Tan Sri Danny Tan for RM943mil.

The deal will see Dijaya acquiring some 73 properties comprising 49 parcels of lands and 16 buildings, valued at some RM1.1bil into Dijaya, giving it market capitalisation of at least RM1bil and thus making it one of the top 10 largest property developers in the country.

This exercise is expected to be completed by the fourth quarter of this year.

“The exercise will see Dijaya getting rental income of RM42.7mil or a yield of 8% per year, whichever is higher, over the next nine years,” said Tong.

Meanwhile, the new land for development injected into Dijaya amounts to RM6.1bil. Dijaya executive director Koong Wai Seng said that the development order for some RM2bil of this land had already been obtained, and developments would start next year.

Presently, Tan controls 66.62% of Dijaya.

He directly owns 30.5%, and indirectly owns 17.86% through Impeccable Ace Sdn Bhd and 18.26% through Golden Diversity Sdn Bhd.

Upon completion of this exercise, Dijaya will have a landbank of 913 acres in the Klang Valley, Johor, Penang and Sabah with an estimated GDV of RM38bil to bedeveloped over the next 10 to 15 years.

The lettable areas of investment properties will also increase to approximately 1.4 million sq ft from the current 550,000 sq ft. The investment properties are tenanted out, offering average yield of 8%

Under the exercise, the acquisition of the properties will be satisfied by RM250mil cash and the balance via the issuance of a 10-year 3% coupon Dijaya redeemable convertible unsecured loan stocks (RCULS), with a staggered conversion price range of RM1.30 to RM2.50 over a 10-year period.

Dijaya will also undertake an equity fund raising exercise via a renounceable rights issue of up to 491.3mil new shares of RM1 each in Dijaya at an issue price of RM1.20 per rights share, together with a bonus issue of up to 122.83 million new Dijaya shares, on the basis of four rights shares for every five existing Dijaya shares held, and one bonus share for every four rights shares subscribed.

By The Star

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