KUALA LUMPUR (July 14): DBE Gurney Resources Bhd, soon to be known as Lagenda Properties Bhd, will be significantly scaling up its affordable housing development arm by acquiring the developer of two housing projects.
In a statement today, the group said it would be buying Blossom Eastland Sdn Bhd, which is developing Bandar Baru Setia Awan Perdana (BBSAP) and Lagenda Teluk Intan (LTI).
Currently, the group has a remaining aggregate gross development value of approximately RM2.1 billion, unbilled sales of RM514 million together with a sizable landbank of around 1,200 acres to be developed.
“Bank Negara Malaysia has forecasted shortage in affordable housing is expected to reach one million units by 2020 and the maximum affordable house prices should not exceed RM282,000.
“The group will stand to benefit greatly from the acquisitions of both BBSAP and LTI as the demand for affordable housing is unmet by developers and the residential units of these two townships are priced at below RM200,000 which is in the affordable range for B40 and M40 house buyers,” it said.
The name change and acquisition of the housing projects were some of the resolutions that were passed by its shareholders at its extraordinary general meeting today.
The other proposals are:
DBE said the approval of the proposals will lead to a healthier balance sheet, where RM108 million cash will be raised from the placement, based on an indicative issue price of 80 sen.
DBE’s net gearing ratio will be drastically cut to 0.2 times from 0.6 after the private placement.
“Pertaining to the proposed acquisitions of the three companies, these three to be acquired companies’ aggregated profit after tax in 2019 was approximately RM127 million, with margins ranging from 25% to 30%.
“This will strengthen DBE’s financial performance in the current financial year ending Dec 31, 2020,” it noted.
“With the approval [of the resolutions], DBE will become one of the biggest affordable housing developers in Malaysia. With this significant milestone in DBE, I look forward to our bright future as we continue to work hard to bring the group to greater heights and create value for our shareholders,” DBE managing director Datuk Jimmy Doh Jee Ming said.
At 3.27pm, DBE remained unchanged at 3.5 sen, with a market capitalisation of RM85.12 million. The stock saw some 4.75 million shares traded.