This article first appeared in The Edge Financial Daily, on June 16, 2016.
KUALA LUMPUR: Sapura Resources Bhd will be channelling the proceeds from the sale of its education assets to develop its Lot 91 office tower project in the KLCC area, which will carry a gross development value (GDV) of RM1.5 billion.
“All our assets and proceeds will be going to getting this project off the ground from this point on,” said managing director Datuk Shahriman Shamsuddin.
“We will be having that building for rental purposes so our cash flow and profits will be coming from that direction,” he added.
Lot 91, designed with seamless integration with the existing KLCC, consists of a 52-storey office tower, convention centre and retail podium. Sapura Resources entered into a joint venture (JV) with KLCC (Holdings) Sdn Bhd in 2011 to develop the project.
“We hope to get this ready by 2020. The GDV is approximately RM1.5 billion, of which we own 50%,” Shahriman told reporters after the group’s annual general meeting and extraordinary general meeting yesterday, where shareholders approved the group’s proposal to sell off its education assets.
Sapura Resources, controlled by tycoon Tan Sri Shahril Shamsuddin, is selling its education assets to Ilmu Education Group Sdn Bhd, the education arm of government-owned private equity firm Ekuiti Nasional Bhd, for RM246.99 million to focus on growing its property and aviation businesses.
Sapura Resources is expected to gain RM314.99 million in cash from the deal, inclusive of a RM68.01 million dividend from a proposed reorganisation of one of the units it is selling.
In a filing with Bursa Malaysia in March, the group said the education assets it is disposing of are its 49% interest in APIIT Sdn Bhd, 49% stake in Asia Pacific University Sdn Bhd (APU) and 37.61% stake in Asia Pacific Institute of Information Technology Lanka (Pvt) Ltd (APIIT Lanka).
The disposal consideration comprises RM58 million for APIIT, RM161.99 million for APU and RM27 million for APIIT Lanka.
Sapura Resources is expected to realise a one-off pro forma gain of about RM192.2 million, based on its audited financial statements ended Jan 31, 2015.
The JV developing Lot 91 secured a 15-year syndicated Islamic term financing of RM1.08 billion last year to finance the project.