KUALA LUMPUR (April 22): Seacera Group Bhd’s unit Duta Skyline Sdn Bhd has entered into a joint venture agreement (JV) with Amazing Symphony Sdn Bhd, a subsidiary of OCR Group Bhd, for a mixed development in Semenyih which has a pontential gross development value of a whopping RM10 billion.
“The Board of Directors of Seacera...as part of its continuous efforts to rehabilitate its financial condition, has decided to monetise its freehold land, measuring 501.5 acres,” according to the group’s stock exchange filing today.
According to the filing, the plan will entail the development of landed residential homes, landed commercial shop units, high-rise strata developments, hospitals, schools, hotels and malls, among other components.
Duta Skyline will be entitled to 22% of the GDV for all low-rise landed developments and 18% of GDV for all high-rise strata development.
The amount will be satisfied by Amazing Symphony through the following manner: firstly, RM10 million in cash, where RM1 million is payable upon execution of the JV agreement, followed by a further RM2 million to be paid within three months of the execution of the agreement.
Finally, the remaining RM7 million will be paid off at a rate of RM1 million per year on the anniversary date of the agreement.
Duta Skyline's remaining entitlement will be paid on a quarterly basis from proceeds of sales received by Amazing Symphony in accordance with its proportion of entitlement.
The project is expected to be developed progressively over a period of up to 30 years, Seacera said.
“The Board is of the view that the future of the Group lies with its property development and construction segment following board’s decision to permanently shut down its only tiles manufacturing plant in Selayang, Selangor (although the trading business of tiles and building materials will continue),” Seacera said.
The group added that the JV represents an opportunity for it to capitalise on the experience and expertise of OCR in the property development sector to develop the project land without any capital outlay.
Seacera had acquired the land in 2015 to diversify into property development. “The project land is currently vacant and has yet to be developed in view of the softening property market in recent years,” it said.
The deal was announced amid Seacera's boardroom tussle with its largest shareholder Datuk William Tan Wei Lian.
Meanwhile, OCR's largest shareholder is Ong Kah Hoe, who has a 20.44% stake in the group.
Shares in Seacera rose 0.5 sen or 1.56% to 32 sen today, giving the group a market capitalisation of RM154.15 million.
http://www.theedgemarkets.com/article/seacera-partner-ocr-rm10-bil-semenyih-development
