KUALA LUMPUR (Nov 11): Ivory Properties Group Bhd is planning to buy a piece of freehold land in Penang for RM65 million.

The 8,093 sq metre land will be used for a mixed development project, the property developer said in a filing with Bursa Malaysia.

It said it is purchasing the land from Zenith Urban Development Sdn Bhd and is considering financing the acquisition via 70% bank borrowings and 30% internally-generated funds.

Subsequent to the completion of the proposed acquisition, the landbank and joint venture development rights of the group will increase to  86 acres from 84 acres, and thus provide Ivory Properties with greater sustainability to its future earnings.

While the proposed acquisition will not have any material effect on the company’s earnings per share and net assets per share for the financial year ending Dec 31, 2020 (FY20), Ivory Properties said the group’s gearing is expected to increase by RM45.5 million, assuming 70% of the purchase consideration is financed by bank borrowings.

Thus, post-acquisition, the net gearing shall increase to 0.42 times, from the current 0.31 times.

Ivory Properties said the proposed acquisition represents a strategic purchase, in line with its strategy to expand its landbank in locations with growth potential and strengthen its foothold in Penang's property market.

“Given its strategic location which is sea-facing and development potential of the property, the proposed acquisition will present synergistic opportunity to Ivory Group to scale up its development in the said vicinity, by capitalising on its already-established presence within that vicinity and complementing Ivory Group’s existing development projects,” the developer said.

Barring any unforeseen circumstances, the proposed acquisition is expected to be completed by mid-2020.

Shares of Ivory Properties closed unchanged at 18.5 sen on Monday, valuing the company at RM90.67 million.