This article first appeared in The Edge Financial Daily on June 28, 2018
KUALA LUMPUR: Country Heights Holdings Bhd plans to raise a RM1 billion “war chest” to fund four projects in the pipeline.
Two of these projects will see the group becoming more prominent in the medical tourism space, with the re-strategising of its hospitality and resorts division and the creation of a wellness, anti-ageing and aesthetics hub.
The other two projects will see the group venturing into the automotive sector with the development of the Mines Car City Centre, as well as the Islamic e-commerce and financial technology sector with its planned Cheng Ho Islamic Trade and Financial Centre project in Melaka. The latter aims to connect with China’s digital economy.
Country Heights founder and executive chairman Tan Sri Lee Kim Yew said the group plans to raise the RM1 billion through direct borrowings, bond issuance or strategic partnerships.
On whether there are concerns on how the funds would be raised, given the company has been loss-making from 2015 to 2017, Lee said the group has very low financial gearing, given the assets it holds.
“Country Heights has very low financial gearing in comparison to its assets, with current loans of only RM200 million versus net tangible assets of around RM778 million. If on a revised net assets value with a revaluation of our assets, the company would be worth over RM2.8 billion,” he told reporters after the group’s annual general meeting (AGM) yesterday.
He also said the group’s losses before were partly due to the “suffocation” it endured under the previous Barisan Nasional government.
“It was so difficult for us to [obtain funding via bank loans] under the previous administration. For us to get back to profitability again, we need to restructure and focus on these four new businesses,” he said.
Of the four ventures, the group will immediately focus on the Mines Car City Centre. It intends to transform the Mines International Exhibition and Conference Centre in Seri Kembangan, with a gross floor area of two million sq ft of commercial and residential space, into the Car City Centre.
Country Heights executive director Matahari Lee, also Kim Yew’s son, will be spearheading the project.
“Essentially, what we are doing is creating an ecosystem to link the real estate, exhibition and automotive industry. This will be a pioneer project within Asean itself, and what we want to do is create a lifestyle.
“Just imagine, if you want to buy a car, you would think of the Mines and we would have all the options for you in a single location, such as banking, insurance, JPJ (Road Transport Department Malaysia) and Puspakom inspection and approvals.
“For phases one and two [of the residential and commercial portion], we are looking at a total gross development value of RM1.5 billion. We will be looking for strategic partners, such as automotive event owners and dealers, as well as providers of car accessories, among others.
“[Currently,] we are in talks with Goldenport Holdings in China, which owns the China GT Championship, to [organise an event that could] replace the Formula One. We are thinking of organising an Asian GT festival, a three-day event to attract motor enthusiasts in the region. We have also been in talks with two local partners for the exhibition [part of the Car City Centre],” said Matahari.
The group aims to complete the Car City Centre project in 24 months, once it has raised the funds needed. The group proposed a bonus issue of up to 137.85 million warrants to raise funds yesterday, to fund the property developer and investor’s working capital.
Its Bursa Malaysia filing shows it plans to issue the five-year warrants on the basis of one warrant for every two existing shares held by shareholders. Country Heights shares shot up 14 sen or 11% yesterday at RM1.41. Kim Yew controls some 64% of the group’s shareholding.