KUALA LUMPUR (Dec 3): Oriental Holdings Bhd's unit Ultra Green Sdn Bhd will partner Oriental Boon Siew (M) Sdn Bhd to complete reclamation works on selected phases of foreshore land in Melaka that covers about 275 acres for RM135.1 million.

Ultra Green is expected to enter into a joint-venture agreement with Oriental Boon Siew to "allow Oriental Boon Siew to carry out and complete the reclamation works" on phases 2A, 3A, and 3B of the foreshore tract, the group's statement to Bursa Malaysia said this evening.

It said its 51%-owned Oriental Boon Siew has appointed Benalec Sdn Bhd as its main contractor, given the latter's requisite expertise. The remaining 49% in Oriental Boon Siew is held by Boontong Estates Sdn Bhd.
 
Oriental said the reclamation work on the three phases mentioned is expected to be completed in 30 months from the date of commencement.
 
"The reclamation project is for future development and will allow for synergy of resources within Oriental Group," it said, adding that the JV with Oriental Boon Siew is beneficial as it has the necessary financial resources to fund the reclamation cost and allow Ultra Green to focus on other aspects of development on the reclaimed land.
 
Oriental said that funding for the reclamation works under the JV will be financed by Oriental Boon Siew's internally generated funds.

Of the 275 acres of land to be reclaimed, the Melaka state government is entitled to one sixth or 45.84 acres, while Ultra Green is entitled to 41.58 acres and Oriental Boon Siew is entitled to the remaining 187.58 acres.
 
To recap, Ultra Green had on Sept 7, 1994, been appointed concessionare to reclaim the portion of foreshore land in the Melaka township coast that measured approximately 1,125 acres after it signed an agreement with Melaka state government.
 
Ultra Green has completed reclamation works on some 624 acres in 2012. The remaining 501 acres consists of 479 acres that have to be reclaimed, with 22 acres classified as a lagoon area.
 
The JV is deemed a related party transaction, as Boon Siew Sdn Bhd is the common shareholder in both Oriental and Boontong, holding 43% and 85.3% stakes respectively.
 
In the past 12 months, Oriental and Oriental Boon Siew has seen some RM230 million transactions in related-party transactions.
 
Oriental closed 20 sen lower at RM6.90 today, giving it a market capitalisation of RM4.28 billion.