Thursday, August 2, 2012

MRCB… dated July 2012

The EPF is planning to inject new assets into its property business.
MRCB, the EPF’s property and construction arm, is in negotiations to acquire private developer Nusa Gapurna Development Sdn Bhd, a Klang Valley based property concern owned by businessman Datuk Mohamad Salim through Gapurna Sdn Bhd.
The deal, to be financed via an exchange of shares, will give the politically well connected businessman a direct stake in MRCB and a lead management role in the merged entity.
Gapurna is in the midst of preparing a proposal for consideration by the MRCB board. However, the valuations for the deal have not been finalized and parties are looking at the possibilities. It is still at a preliminary stage.
However government officials say MRCB’s acquisition of Nusa Gapurna will be finalized in the coming months (July 2012 & Beyond).
The swap will give Salim and his partners just under 20% of MRCB.
The proposed takeover will help streamline the EPF’s shareholding structure ib both MRCB and Nusa Gapurna. The pension fund owns a direct 42% stake in MRCB and another 40% equity interest in Nusa Gapurna Salim’s Gapurna owns the remaining 60% stake in Nusa Gapurna.
Under the proposed takeover plan, MRCB will acquire Nusa Gapurna’s development projects in the Klang Valley , which has an estimated GDV of between rm11 billion and rm13 billion.
The deal is expected to be finalized by end 2012, will be a bonus for MRCB.
Nusa Gapurna owns 60 acres of prime commercial land in PJ, Old Klang Road and SJ. The injection will also keep MRCB busy as its current KL Sentral development is expected to be completed within the next two years (2012 & beyond).
The crown jewel of Nusa Gapurna’s landbank is a 40 acre land parcel in Section 52, PJ. The group plans to begin construction in the first quarter 2013.
Apart from PJ Sentral, Nusa Gapurna also owns 17 acres in Taman Seputeh, near old klang road, and 3.5 acres next to Subang Parade in SS16, SJ.
Market observers do not discount the possibility that there could be another round of corporate exercises of M&As in the near term. MRCB will be actively looking for the right party to contribute major assets.
The new landbank injection is good news for MRCB after its failed merger with IJM Land in 2010.
As the property developer unit of EPF, MRCB is also said to be the frontrunner to develop some parcels of the 1214ha Rubber Research Institute land in Sungai Buloh. It is also tendering for some MRT and property projects.

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