LBS Bina Group Bhd’s indirect wholly-owned subsidiary, Sejuta Bina Sdn Bhd, and Saga Tunas Sdn Bhd will jointly develop six pieces of freehold vacant Malay Reserved Land with a total land area measuring approximately 2.82 hectares in Sungai Pencala, Kuala Lumpur.
It said the proposed development, planned to be commenced within 12 months of the agreement becoming unconditional, would be funded through a combination of internally generated funds and bank borrowings.
“This project is planned to be carried out in phases and spanned over a development period of five years and is estimated to have a gross development value of RM1 billion,” LBS Bina said in a filing with Bursa Malaysia today (July 5).
LBS Bina said Saga Tunas shall be entitled to a cash consideration of RM67 million forming part of the land cost of the proposed development and 10 per cent of the gross profit generated from the development on the land, which shall be settled by way of cash and/or in-kind upon completion of the entire development.
It said the development is expected to contribute positively to LBS Bina’s future revenue stream and profitability.
“With the strategic location and improving positive demand, the management is confident that the development will receive optimistic demand and growth potential.
It said the agreement is expected to have a positive effect on earnings per share and net assets per share arising from the profit to be contributed over the duration of the development.
It added that the effect of the joint venture agreement on the gearing of the group would be dependent on the eventual funding mix for the development.
