Naim Indah's unit inks MoU with Burmese firm to build 32-storey tower in Yangon

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PETALING JAYA (June 15): Naim Indah City Development Sdn Bhd (NICD), a wholly-owned subsidiary of Naim Indah Corporation Bhd, has inked a memorandum of understanding (MOU) with Myanmar-based United Pacific Development Co Ltd to develop a 32-storey office tower at Pyay Road, Yangon, Myanmar.  

In a filing with Bursa Malaysia, Naim Indah (fundamental: 0.2; valuation: 0.3) said a joint venture company (JVCo) will be established and approved under the Myanmar Foreign Investment Law 2012 to undertake the project, which is to be built on land belonging to Hla Myint Shwe and Aye Myat Mon.  

“The MoU will be for a period of three months, commencing from the date of the MoU, June 13, 2015; thereafter, the parties shall negotiate in good faith and use their best endeavours to enter into definitive agreements in respect of the transactions contemplated to the MOU,” the filing read.

The filing also stated that the MoU shall be terminated on the earliest date, after the definitive agreements are signed, “the date falling six months after the MoU was signed and [on] a termination date that the parties have agreed [to] in writing”.

The property developer and timber logging firm said the proposed initial paid-up capital of the JVCo is yet to be determined, but that both NICD and United Pacific will hold an equivalent 51% and 49% interest in the JVCo, respectively.

The filing did not state the project’s required amount of capital, save that the committed investment amount of the JVC is contributed by the parties in proportion to their respective percentage of shareholding.

United Pacific is expected to contribute its proportion of the committed investment amount in kind, through a lease of the said land; while NICD is to contribute its proportion of the committed investment amount, in accordance with a payment scheduled agreed between the parties, the filing read.

NICD also undertakes to complete the development and construction of the project within four years from the date of the JV agreement, the filing further noted.

Naim Indah shares closed unchanged at 10.5 sen today, with a market capitalisation of RM81.08 million.

(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).