E&O to develop RM1.5b infrastructure in Elmina West over 3 years

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KUALA LUMPUR (Sept 28): Property developer Eastern & Oriental Bhd (E&O) said today construction of infrastructure at the 54.63ha freehold land in Elmina West will be carried out over the next three years.

In a filing with Bursa Malaysia, the company said the full payment of RM192.75 million for the parcel of land acquired from Sime Darby Elmina Development Sdn Bhd, an indirect wholly-owned subsidiary of Sime Darby Bhd, was completed today.

E&O said Sime Darby Elmina Development will continue the construction work on the land, while instalment payments are settled.

According to the sale and purchase agreement, E&O had said 90% the construction sum of RM47.04 million will be paid in equal quarterly installments, over the construction period.

E&O had entered into a sales and purchase agreement (S&P) agreement with Sime Darby Elmina Development on July 4, 2014, for the development of a wellness and liveable city. It had acquired the land from Sime Darby Elimina for RM239.8 million.

The project, expected to be higher than its baseline 1 gross development value (GDV) project of RM1.5 billion, will encompass semi-detached houses, cluster houses, double-storey linked houses, condominiums, service apartments and a wellness centre.

Under the agreement, E&O would share 20% of the proceeds with Sime Darby, should the value exceed the baseline GDV.

E&O (fundamental: 1.3; valuation: 1.4)'s shares closed 2 sen or 1.26% higher at RM1.61 today, for a market capitalisation of RM1.98 billion.
Sime Darby (fundamental: 0.8; valuation: 1.4)'s shares meanwhile, closed 4 sen or 0.54% higher at RM7.48, for a market capitalisation of RM46.46 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.)