KUALA LUMPUR (Nov 24): Damansara Realty Bhd has received the Economic Planning Unit (EPU)’s approval for the acquisition of a 53.14 acres land in Johor for RM130.3 million.
In a statement, Damansara Realty said the acquisition forms part of its proposed RM141.5 million settlement agreement with Johor state investment arm Johor Corporation (JCorp), allowing it to reduce its net current liabilities and return its balance sheet to health.
Damansara Realty — which is an integrated facilities management (IFM), project management consultancy (PMC) and property group — announced that its associate company DAC Properties received the EPU’s approval on Nov 22, and has completed the acquisition of the abovementioned land from JCorp.
Damansara Realty group chief executive officer Brian Iskandar Zulkarim said with completion of the acquisition, the group has met almost all of its obligations under the settlement agreement with JCorp, and will reduce its net current liabilities by RM132 million.
“The completion will mean a stronger balance sheet for Damansara Realty, slashing our net current liability to RM23 million, from RM155 million before,” he said.
Located in Tebrau, Johor Bahru, the land is part of Damansara Realty's 63-acre Central Park being developed in partnership with the Hong Kong-listed Country Garden, within the strategically located Taman Damansara Aliff, along the Pasir Gudang Highway.
“Damansara Realty will still own about 10 acres within Taman Damansara Aliff, after Central Park is completed.
“With this landbank acquisition and the good progress on Central Park, Damansara Realty is on track to strengthen its property development arm", Iskandar said.
Central Park is an integrated township comprising, amongst others, residential homes, commercial shop lots and amenities, to be completely developed over the next six to eight years, with an estimated gross development value (GDV) of about RM3.5 billion.
The settlement comprises two acquisitions of land by Damansara Realty from JCorp for RM141.5 million cash, and a land swap.
As part of its joint venture with Country Garden Malaysia, Damansara Realty has already completed the payment of RM130.3 million of the total RM141.5 million settlement sum, leaving a balance of RM11.2 million to be paid.
“Aside from reducing our current liabilities, we are confident [that] we are on track for a full year of profit,” Iskandar added.
The move is a key milestone in its transformation programme which has steered Damansara Realty’s corporate recovery in 2017, and broken its two-year streak of losses with its first quarterly net profit earlier this year.
Meanwhile, Damansara Realty has secured additional fund-raising capacity via a redeemable convertible notes (RCN) programme, together with a bonus issue of warrants.
The RCN issue, which was approved earlier this month, will give Damansara Realty the ability to raise up to RM150 million to fund the settlement, and boost the group’s cash flow.
The RCN will also enable the group to raise working capital to strengthen its integrated facilities management and project management and consultancy segments, which are currently the main drivers of revenue growth.
Damansara Realty shares closed down 0.5 sen or 0.87% today to 57 sen, for a market capitalisation of RM179 million.