Karambunai invests RM100mil in resort

Karambunai Corp Bhd (KCB) is investing RM100mil for a period of three years to develop products in Karambunai as part of its move to position Karambunai as a top tourism destination. 

Its chief operating officer Robin H.L Loh said KCB was already well geared to develop world-class tourism products like the Sabah Cultural Centre, Sabah’s first cable car system, Nature Park, Aviary and Butterfly Park in Karambunai. 

“At the moment we are developing the 110-acre theme park, which will take about one year to complete,” he told reporters after the signing between KCB-Affin Merchant Bank Bhd and KCB-Abrar Discounts Bhd in Petaling Jaya yesterday. 

He said the development was 70% financed by Bank Pembangunan dan Infrastruktur Malaysia and 30% by the shareholders. 

Bank Pembangunan has already extended a RM50mil tourism infrastructure fund to KCB to partly finance these eco-tourism related projects.  

Recently KCB also obtained a bridging loan of RM47mil from Sabah Development Bank to develop other components of its vast land bank.  

Loh said KCB owned 1,500 acres in Karambunai which was targeted to be developed in 10 years. 

Currently, it has a 500-room hotel, the Nexus Resort Karambunai, with an 18-hole golf course. 

“After developing all these tourism products, KCB will look into developing more hotels,” Loh said, adding that Sabah expected two million tourists this year and Karambunai anticipated to capture at least 25% of the total. 

The agreement signed between KCB and Affin Merchant Bank Bhd essentially involves the appointment of Affin Merchant as the principal adviser, lead arranger and primary subscriber of an asset backed securitisation exercise of approximately RM1.04bil. 

It is to raise proceeds of about RM200mil from the issuance of approximately RM200mil nominal value senior notes and approximately RM840mil nominal value junior notes repayable over a period of seven years. 

KCB will inject Nexus Resort Karambunai and parcels of land in Karambunai into a special purpose vehicle (SPV).  

The bonds to be issued by the SPV will be rated by Rating Agency Malaysia Bhd. 

KCB will use the proceeds of SPV bonds to partly pay Abrar Discounts Bhd, repay other bank borrowings and for working capital.  

This asset backed securitisation exercise is subject to the approval of the Securities Commission and other relevant authorities.  

Meanwhile, the signing between KCB and Abrar is for the restructuring of the RM420mil zero coupon redeemable secured bonds (the existing bonds). 

The agreement covers the restructuring of the existing bonds into a redeemable secured loan stock redeemable over the period of five years with certain milestones of redemption to be observed by KCB. – Bernama 

 KBUNAI :  [Stock Watch]  [News]

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