KUALA LUMPUR (Oct 28): Malaysian Resources Corp Bhd (MRCB)’s wholly-owned subsidiary MRCB Land Sdn Bhd is expected to fork out RM269.5million for a 70% stake in CSB Development Sdn Bhd, the joint venture company (JVC) that will undertake the development of Cyberjaya City Centre (CCC).
In a filing with Bursa Malaysia today,the company said MRCB Land has entered into a joint venture agreement with Cyberview Sdn Bhd, a government-owned company wholly-owned by the Minister of Finance. Cyberview will hold the remaining 30% in CSB Development.
MRCB Land has agreed to subscribe for 700,000 ordinary shares of CSB with a par value of RM1 each, and 2.69 million redeemable preference shares (RPS) with a par value of RM1 and a premium of RM99 each, for a total subscription payment of RM269.5 million.
On the other hand, Cyberview will subscribe 300,000 ordinary shares of CSB, with a par value of RM1 each, and 1.15 million RPS with a par value of RM1 and premium of RM99 each, for a total subscription payment of RM115.5 million.
“The parties have agreed to form a JVC, CSB Development, for the purpose of purchase and subsequently carrying out the development within the CCC Development Area 1, and CSB Development will also be given, amongst others, a first option over CCC Development Area 2, subject to terms and conditions to be negotiated,” read the announcement.
Cyberview was mandated by the Malaysian government to spearhead the development of Cyberjaya, and has earmarked approximately 141.27 acres of land located in Cyberjaya the for development of the CCC. The group is also the registered proprietor of the land being part of the CCC, totalling approximately 113.27 acres.
The CCC will be developed into a mixed development, comprising a mix of residential units, retail and commercial space, hotels and a convention centre, in line with the concept of a smart, sustainable and vibrant city centre.
The total area under CCC Development 1 is approximately 53.37 acres, while CCC Development area 2 is approximately 59.89 acres.
In arriving at the subscription payment amount, MRCB said it had taken into consideration the market value of the CCC Development Area 1, which is RM350 million or approximately RM150.54 per square foot, as appraised by independent valuer CH Williams Talhar & Wong.
The group had also taken into account, the earnings potential of the development and its expected contribution to MRCB Group of Companies, and the potential enhancement to the area after taking into the construction of certain common infrastructure and the upcoming mass rapid transit line.
The proceeds from the JVC subscription payment by both parties will be made towards acquisition of lands within CCC Development Area 1, amounting to RM348.75 million or RM150 per square foot, as well as payment of related land costs, such as 3% stamp duty and 6% goods and services tax amounting to RM31.38 million, as well as an initial working capital amounting to RM4.87 million.
The land acquisition price for the CCC Development Area 1 represents a discount of approximately RM1.25 million, or 0.24% over its market value. The subscription will be funded through bank borrowings and/or internally-generated funds.
MRCB Land will be the project management company for the CCC development, and shall receive a fee being a payment of 4% of the total construction of the project excluding GST.
MRCB shares were unchanged at RM1.19 today, with a market capitalisation of RM2.13 billion.
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