FACB Resorts Bhd, the white knight to the rescue of indebted Sri Hartamas Bhd, hopes to finally complete the latters restructuring by September and have a new subsidiary assume its listed status on the KLSE main board.
This in turn would help FACB return to profitability within the next 2-3 years, said its chief operating officer Eric Tay.
He said that on completion of the rescue exercise which began in May 2001, FACB would have received 660 million shares or a 78% stake in Hartamas Group Bhd (HGB), which would be listed in place of Sri Hartamas. FACB would later reduce that stake to 75% or less to meet the Securities Commission (SC) guidelines on public shareholding spread.
As part of the scheme, FACB would also have injected two major assets,a beachfront project in Sabah known as Nexus Resort Karambunai and a 1,363-acre development near Putrajaya called Bukit Unggul Eco-Media City, with a total value of RM660mil into the new company, he added.
Tay told reporters this after FACBs EGM yesterday during which shareholders approved the companys participation in the rescue of Sri Hartamas.
The exercise had also been ap- proved by the SC, Pengurusan Danaharta Bhd and the creditors of Sri Hartamas, he said.
Tay said the exercise would allow the group to be better focused, with FACB involved in leisure and tourism, and HGB concentrating primarily on property development.
The completion of the exercise will also enable FACB to take advantage of the liquidity and marketability of the quoted HGB securities to part-finance the development of projects as well as save interest expenses by repaying some of the FACB groups existing borrowings of some RM450mil.
FACBs business plans have been held back pending the completion of the exercise. The delay, in turn, has affected the groups financial health. The groups net loss of RM76mil for the year ended March 31, 2003, was substantially due to interest costs of some RM40mil.
In its circular to shareholders, meanwhile, FACB said the Sri Hartamas rescue scheme would result in a one-off charge of between RM117mil and RM121mil on the group's current earnings, while HGB would incur a one-off charge of RM151mil.