KUALA LUMPUR: Malaysian Resources Corporation Bhd's (MRCB) subsidiary MRCB Land Sdn Bhd is acquiring Projekmaju Sdn Bhd, a company with development rights for a RM650 million project land in Petaling Jaya, from Nusa Gapurna Development Sdn Bhd, for RM1 million.
In a filing with Bursa Malaysia Securities today, MRCB said Projekmaju is a special purpose vehicle (SPV) for the development of a 11 hectare land area on Jalan Sultan, Petaling Jaya, Selangor.
The project was secured from the government in 2013, following an approval in principle. The project land fronts Jalan Sultan and Persiaran Barat, near the northern side of the Federal Highway, adjacent to MRCB's PJ Sentral development.
The development is subject to a pending privatisation agreement with the government, which has yet to be signed. As part of the project, Projekmaju is responsible for relocating the government agencies currently occupying the project land, at its own expense.
In return, the government will transfer ownership of the land to Projekmaju.
In the filing with the bourse, MRCB said MRCB Land will also pay off shareholders advances provided to Projekmaju by Nusa Gapurna to the tune of RM17.9 million.
The purchase consideration and repayment of shareholder advances will be settled in cash, raised through internally generated funds.
MRCB said the proposed acquisition of Projekmaju presents an opportunity to take over the development project, which is planned as phase 2 of the PJ Sentral Development.
The acquisition is expected to enhance the value of the land, leveraging the synergy with MRCB's existing developments in the area.
MRCB believes the acquisition will contribute positively to the group's earnings and cash flow in the future, given the location and development potential of the project land. The transaction is expected to be completed following the execution of the SPA.