OWG to finish RM180mil Komtar revitalisation job by year-end

The old Prangin market, popularly known as Sia Boey near the iconic Komtar, has been designated by the state government as the site for the central LRT station. /Star pic by: CHAN BOON KAI/The Star/ (27th Nov 2015)

KUALA LUMPUR: Only World Group Holdings Bhd (OWG) expects to complete the project to revitalise the 65-storey Komtar tower in Georgetown, Penang, in the second half of this year.

The operator of food outlets, water amusement parks and other family attractions, in its announcement on Monday, had said it would use RM48mil from the estimated gross proceeds of up to RM50.17mil from a private placement exercise to fund part of the cost of its Komtar revitalisation project, which has been expanded from the original plan.

On Wednesday, OWG gave further details to Bursa Malaysia on the revitalisation project that it clinched from the Penang Development Corp in December 2012 (prior to its listing in December 2014).

The Shah Alam-based company explained that the original Komtar revitalisation project involved the proposed refurbishment and enhancement of five specific levels within Komtar leased to OWG – levels 5, 59, 60, 64 and 65, with a total built-up area of 130,333 sq ft - to create high end commercial space for retail, food and beverages and recreational purposes.

OWG was granted a 45-year lease, with the option to extend the lease for another 15 years.

“Subsequently in 2015, additional floor (level 66) and new spaces (levels 3, 4 ,5 and 6) were added to the project which would at least double the total built-up area,” it said.

On Jan 18 when it announced the private placement, OWG gave the total cost to expand the Komtar revitalisation project as RM180mil, substantially higher than the original plan’s amount mentioned in its initial public offering (IPO) prospectus. The remaining cost of the project, which is expected to turn Komtar into an integrated tourism destination, would be funded via internally generated funds and bank borrowings, it said.

In its prospectus dated Nov 26, 2014, OWG had said the revitalisation project would cost RM60mil and that it would use 60.44% (RM30mil) of its IPO proceeds to partially fund the project. According to the document, the project was scheduled for completion in the third quarter of 2015.

OWG shares lost 14 sen to close at RM2.39 on Wednesday.