Thursday 28 Mar 2024
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KUALA LUMPUR (July 21): Berjaya Corp Bhd (BCorp) has proposed to subscribe for one new ordinary share representing 50% of Berjaya Kyoto Development (S) Pte Ltd's enlarged share capital, for S$34.66 million (about RM97.28 million) cash, which will allow it to participate directly in the Four Seasons Hotel & Residences project in Kyoto, Japan.

BCorp said the proposed subscription will also increase its landbank and portfolio of properties owned which include The Ritz-Carlton Residences in Malaysia. 

In a filing with Bursa Malaysia, BCorp said it has today signed a subscription agreement with BLand and BKyoto for the proposed subscription.

Currently, Berjaya Land Bhd (BLand) is the sole shareholder of BKyoto.

Upon completion of the proposed subscription, BCorp and BLand will have equal equity, that is, 50% each in BKyoto. Tan Sri Vincent Tan Chee Yioun is a major shareholder of both BLand and BCorp.

In conjunction with the proposed dilution, BCorp will advance to BKyoto Group up to RM152.74 million to part-settle the inter-company debts between BKyoto Group and BLand as well as to fund working capital of the BKyoto Group in proportion to its shareholdings in BKyoto.

"The proposed dilution will enable BLand to reposition its financial resources and commitments to other property developments within the BLand Group while retaining a 50% substantial stake in BKyoto," BLand said in a separate filing.

BLand added that the proposed dilution will not have any material impact on the net assets and gearing of BLand Group for the current financial year ending April 30, 2016 (FY16).

However, the proposed dilution will result in an estimated gain of about RM147.9 million in BLand arising from the deemed disposal cum deconsolidation of BKyoto and the re-measurement of the fair value of the remaining stake of 50% in BKyoto.

The proposed dilution is expected to be completed by the third quarter of 2015.

BKyoto Group is currently developing a 5-acre piece of land in Kyoto into a commercial development comprising a 123-room hotel and 57 units of residences known as the Four Seasons Hotel & Residences, with an estimated development cost including land cost of about 33.69 billion yen (RM1.05 billion).

The Four Seasons project is expected to be completed by the third quarter of 2016. Presently, about 45% of the construction works has been completed.


Both BCorp and BLand said their audit committee is of the opinion that the proposed subscription by BCorp in BKyoto is fair, reasonable and on normal commercial terms and is in the best interest of the group.

In addition, the audit committee is also of the view that the proposed dilution is not detrimental to the interest of the minority shareholders of the group.

BCorp (fundamental: 0.9; valuation: 2) shares closed up 1.27% at 40 sen yesterday, with a market capitalisation of RM1.73 billion. BLand (fundamental: 0.55; valuation: 1.2) shares also ended the day up 3.65% at 71 sen, bringing a market cap of RM3.54 billion.

(Note: The Edge Research's fundamental score reflects a company’s profitability and balance sheet strength, calculated based on historical numbers. The valuation score determines if a stock is attractively valued or not, also based on historical numbers. A score of 3 suggests strong fundamentals and attractive valuations.)
 

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