PETALING JAYA: In a bid to expand its land-bank, Gamuda Bhd has proposed to fork out RM784mil in cash to acquire a company that owns a 619ha leasehold agricultural tract.
Gamuda has proposed to acquire the entire equity interest in Salak Land Sdn Bhd, which is owned by the Tan family of Mahajaya Bhd fame.
Established in 1994, Salak Land is involved in property holding, the development of an eco-tourism resort and plantations.
Gamuda said the proposed acquisition would enable it to gain ownership of the 619ha, which is located in an established area of Selangor with positive prospects for mixed property development.
In an announcement, it said: “The land is located right next to Expressway Lingkaran Tengah (ELITE Highway) between km24 and km26.4.”
It added that the parcel was accessible via Jalan Klang-Banting, Jalan B18, the Shah Alam Expressway and the ELITE Highway via the KLIA interchange.
The lease tenure of the land expires in 2093.
It plans to develop the parcel into a contemporary comprehensive township to leverage on the Klang Valley property market.
Assuming that the RM784mil purchase is purely based on the consideration of the prized asset Salak Land owns, then Gamuda would be paying RM11.77 per sq ft (psf) for the township land.
Last April, Tropicana Corp Bhd had bought 474.3ha at Canal City for RM1.3bil or RM25 psf.
A search with the Registrar of Companies showed that Salak Land owns non-current assets worth RM30.93mil, had liabilities of RM8.51mil, a share capital of RM10.8mil and reserves of RM12.62mil.
It registered a revenue of RM9,000 but made a loss of RM66,455 for the financial year ended Dec 31, 2013.
Salak Land is wholly owned by Salak Park Sdn Bhd, which was founded by Datuk Tan Leong Min in the early 1970s.
Salak Park, in turn, is co-owned by Mahajaya Realty Sdn Bhd and Myomni Sdn Bhd.
Gamuda said the acquisition would be entirely satisfied in cash, which would be financed via internal funds and/or bank borrowings.
It expects to complete the transaction on Oct 2.
Although there is no immediate material impact to its earnings and gearing, the construction heavyweight expects the purchase to contribute positively to its earnings over the medium to long term.
Gamuda was sitting on a cash pile of RM1.27bil as at April 30, while its short-term borrowings stood at RM649mil.
It has been pursuing township land actively. Last June, it bought 14 parcels of land measuring 293.1ha in Rawang that had been tendered out by the Government for RM620mil.
Gamuda is said to have outbid a number of big property names for the leasehold agriculture land. Gamuda’s stated rationale for the acquisition then was also similar – for it to further establish itself in the property development sector.
In a June report, AmResearch estimated Gamuda’s land-bank market value at RM6.48bil, or 48.4% of the company’s net asset value.