Ivory - what NEXT?

Its land disposals got the market talking. This is because the group seems to be cashing out from its home base in Penang and venturing into Iskandar Malaysia.

The move comes amid high land prices in Penang and the rising visibility of Iskandar Malaysia as a vibrant development corridor in the south.

It had entered into a JV agreement with JB Lee Properties Sdn Bhd to develop a mixed use project on a 7.1 acre parcel in Teluk Jawa, JB, with a DGV of about rm2 billion.

On Jan 14 2015 it had entered into a sales and purchase agreement with Jesselton Land Sdn Bhd for the disposal of its land in the northeast district of the Penang Island for rm150 million.

On Jan 22 it had also entered into a share sale agreement to divest its 49% stake in Aspen Vision Land Sdn Bhd for rm55 million.

Proceeds from the disposal totaling rm205 million will be partially utilized to reduce the group’s gearing level and fund future projects. It will net gain of rm73 million or rm0.1645 per share from the disposals by Dec 2016 when both deals are expected to be completed.

As at Sept 30 2014 its short long term debts stood at rm318.2 million. Its gearing stood at 0.81 times.

By selling the land, Ivory will now (Jan 2015) miss out on future profits though the proceeds can be used to reduce its gearing.

What is more perplexing is the fact that Ivory is venturing into Iskandar, a region which is said to be facing a surplus of property.