Magna unit in RM100mil land deal

Shah Alam 20-acre acquisition to be paid by RM70mil cash and share issuance

KUALA LUMPUR: Magna Prima Bhd unit Magna Ecocity Sdn Bhd has proposed to buy 20 acres from PCM Bina Sdn Bhd, located in Section 15, Shah Alam, for RM100mil via cash and share issuance.

Magna Prima signed a conditional sale and purchase agreement with PCM Bina Sdn Bhd yesterday and stated that the RM100mil payment would be satisfied by RM70mil cash and the balance in the form of 1.11 million issuance of new ordinary shares representing a 30% interest in the enlarged share capital in Magna Ecocity or at approximately RM26.92 per Magna Ecocity share.

The cash consideration portion of the proposed land acquisition would be financed through a combination of internally generated funds and bank borrowings, of which the breakdown had yet to be determined, Magna Prima said.

The said land was located at the north-west intersection of Federal Highway, Expressway Lingkaran Tengah (ELITE) Highway and Guthrie Corridor Expressway, it said in a statement to Bursa Malaysia.

“Magna Ecocity will be responsible to undertake the overall construction and completion of the proposed development of the property. Currently the property is vacant,” it said.

Magna Prima is proposing to develop the land into a mixed residential and commercial project, comprising 180 units of 3-storey shop offices and 1,620 residential apartments.

“The gross development value of the proposed development is estimated at RM832.67mil and the total development cost is estimated to be RM624.83mil with an expected gross profit of RM207.84mil. The proposed development is expected to commence in 2013 and is estimated to be completed by 2016,” it said.

The proposed land acquisition is subject to approval and barring any unforeseen circumstances, the proposed acquisition is expected to be completed within the fourth quarter of 2012, it said. - The Star