A BACKDOOR listing on Bursa Malaysia is in the offing for Mines Golf Resort Bhd (MGRB), the developer of the RM1.37bil Mines South Lake project.
Such a move, according to MGRB's newly-appointed chief executive officer, Joanne Yeoh Poh Suan, is very much a part of her business plan for the company.
She is also keen on forming joint ventures with local or foreign companies to undertake the development of the massive South Lake project in 10 phases over a period of seven to 10 years.
“We are already in negotiations with some public listed companies on specific projects within South Lake,” said Yeoh, who joined the company on June 1.
“The idea is for us to provide the land while the JV partners fund the development. In that way, we do not have to go to the banks for funding,’’ she told StarBiz in an interview.
But for the interim, MGRB expects to wrap up a long-term funding facility of close to RM80mil that it needs to begin construction of the retail portion and amphitheatre of South Lake
The company had secured a RM177mil long-term facility last year to kick-start the project. It will roll out the lake homes and “Sepanyol” townhouses over the next two years.
On the backdoor listing plan, Yeoh said MGRB was already in talks with several listed companies but she expected the exercise to be “on-going over the next 12-month period.’’
She declined to name the companies involved in the talks but hinted that the final choice would be a property- related firm.
“The exercise may involve the injection of the entire South Lake project into the listed vehicle. To us, a backdoor listing is more viable versus an IPO (initial public offering) which I believe takes far too long,’’ she said.
Established 10 years ago, MGRB has a paid-up capital of RM50mil. The company was the developer of the Mines Golf Club, which it later sold to Country Heights Holdings Bhd (CHHB).
But MGRB has never been under the CHHB umbrella although the two companies have a common substantial shareholder in Tan Sri Lim Kim Yew.
Lim has a 58% stake in MGRB, while 30% is held by bumiputra investors, 10% by Chung Hwa Pictures and the remaining 2% by some individuals.
“When we talk about The Mines Resort City, it is an entire township made up of both the South and North Lakes. The North Lake is almost complete, with a convention and exhibition centre, shopping fair, hotel (The Palace of the Golden Horses) and other facilities, and all these were developed by CHHB,’’ Yeoh said.
Last Friday, the owner of The Palace of the Golden Horses – The Mines City Hotel (owned by CHHB) – announced it was offering 200 million new shares as part of its IPO exercise.
The South Lake project is being developed on a 220-acre site next to North Lake. In November last year, MGRB launched the first of five apartment blocks that will make up the The Heritage Service Residence project. The second block was launched early this year, and this Saturday will see the launch of the third.
“What we are creating at South Lake is a new development with a waterfront feature,” Yeoh said. “Just imagine this – living in a city and getting up everyday to a picturesque view of a lake ... that is what we are offering.”
The other phases of South Lake will feature bungalows under the Lake Homes theme; townhouses built in the “Sepanyol” style; a Bali Island concept; The Angles, The Care, The Touch, The Mirage, The Venice and The Swiss.
MGRB recorded RM2.26mil in net profit for the financial year ended Feb 28, 2004 on the back of RM10mil in turnover.
“We project that our profits are going to be phenomenal as we continue to launch new phases. For the current year, our net profit would definitely be more than 100% higher than that achieved in 2004,” Yeoh said. Thereafter, we believe we can expect a 20% growth rate for the following two years (2006/2007). After that, a 15% growth rate per annum can be expected,’’ she said. The expected gross profit for the South Lake development was RM500mil.