KUALA LUMPUR (April 2): Sanbumi Holdings Bhd’s unit Sanbumi Sawmill Sdn Bhd (SSSB) is going to jointly develop a proposed mixed development in Seberang Perai, Penang, worth an estimated RM127.81 million, with a private firm Iconic Development Sdn Bhd (IDSB).

SSSB inked a joint venture agreement today with IDSB for the proposed JV on the project, which comprises shop lots, offices and a budget hotel.

In a filing today, it said SSSB shall facilitate the implementation and completion of the development project, named ‘Iconic Point’, which is expected to commence in July 2019 and be completed by June 2021.

To partipate in the project, SSSB will pay IDSB an upfront participation fee of RM18 million which shall be satisfied via the proposed issuance of 57.32 million new redeemable convertible preference shares, at an issue price of RM0.314 each.

In return, SSSB shall be entitled to 65% of the gross development profit of the development project, while IDSB shall be entitled to the balance 35%.

Additionally, it is also proposing to raise an estimated RM22.04 million via the issuance of 74.7 million special issue shares at an indicative issue price of RM0.295, representing 30% of the group’s existing share capital, to independent third party investors to be identified.

The estimated proceeds is expected to fund the development cost of the project as well as finance expenses in relation to the proposals.

Sanbumi ended four sen or 12.12% higher at 37 sen today, valuing the company at RM92.13 million. Some 11.04 million shares were traded.