KUALA LUMPUR (April 25): TWL Holdings Bhd, formerly Tiger Synergy Bhd, is buying a 8,479 sq m piece of land in Seri Kembangan, Selangor for RM13.9 million, with a view to develop the land into a residential project with a gross development value (GDV) of RM84.26 million.

TWL said the proposed acquisition is in line with the group’s business strategy of focusing on the construction and property development segments. As at April 22, TWL is involved in eight ongoing property projects with an estimated total GDV of RM1.81 billion.

In a bourse filing on Monday (April 25), TWL said its wholly-owned subsidiary TWL Land Sdn Bhd has entered into a conditional sale and purchase agreement with Stellar Vantage Sdn Bhd for the proposed acquisition.

The purchase consideration will be satisfied partly via RM500,000 cash and partly via issuance of 166.05 million new TWL shares at an issue price of 8.07 sen apiece. The issue price of 8.07 sen per share represents a discount of 9.93% to the 5-day volume-weighted average market price of the shares up to April 22 of 8.96 sen.

Post-acquisition, Stellar Vantage will hold a 4.59% stake in TWL. The shareholders of Stellar Vantage are Tong Hock Sen and Lam Su Mung, holding 90% and 10% equity interest respectively.

TWL said the application for development order for the project has been submitted on Jan 12 and is currently pending approval.

"The proposed acquisition is expected to contribute positively to the group's future earnings via the profits to be derived from the project," it added.

The project comprises the proposed development of 180 units of apartment, car park podium and residential facilities such as multipurpose hall, swimming pool, deck, gymnasium, toilet and playground, among others, with a net floor area of 15,395 sq m and a gross floor area (including car park) of 34,414 sq m.

TWL said the gross development cost (GDC) of the project is estimated at RM55.69 million, which is expected to be incurred over the development period of three years.

"The GDC is expected to be funded via internal funds, bank borrowings and/or future fund raising exercises to be undertaken if required," it noted.

In October 2021, the group completed a rights issue exercise, raising RM44.06 million. The proceeds raised are intended to be used mainly to fund its existing property development projects and for working capital.

This month, it had also completed a private placement exercise which raised RM40.46 million, the proceeds of which will be used to fund the construction of a new development featuring a high-rise apartment building in Setapak here.

TWL said subject to all relevant approvals being obtained, the proposed acquisition is expected to be completed by the third quarter of 2022. Mercury Securities Sdn Bhd has been appointed as the principal adviser to the proposed acquisition.

TWL shares closed down 0.5 sen or 5.56% at 8.5 sen on Monday, bringing a market capitalisation of RM301.76 million.