PETALING JAYA: Benalec Holdings Bhd is confident it can generate enough cash internally to fund the reclamation works of the massive Tanjung Piai Maritime Industrial Park (TPMIP) project in Johor.
Having reclaimed more than 2,400 acres in Malacca, group managing director and CEO Datuk Vincent Leaw Seng Hai said the firm had to date monetised most of its reclaimed land and was seeing the fruit of its labour.
“We have to fork out the entire reclamation costs upfront and recoup our investments later on as we monetise the land we have entitlement to as payment in kind.
“Our main source of internally generated funds come from the monetisation of our reclaimed land,” he revealed.
At present, the group has over 200 acres of reclaimed land that have yet to be sold and more than 300 acres awaiting to be reclaimed in Malacca, apart from an additional 100 acres being held for sale in Pulau Indah, Port Klang.
“We are optimistic that we can monetise these land banks soon to generate more cash flow to reinvest into our TPMIP in Johor,” he said.
According to the latest quarterly report, Benalec has total liabilities of RM161.64 mil, including bonds of RM149.9mil. Its cash amounted to RM142.19mil and this includes fixed deposits of RM133.51mil.
Benalec carved a niche to reclaim land in Malacca where it had sold seafronting properties.
On that note, Leaw said the group would replicate its strategy in Melaka for its Johor projects.
Meanwhile, Leaw revealed that Benalec was also exploring other routes of equity fund raising for future investments.
This was not restricted to land reclamation but for also oil terminals by way of private placements, rights issue, merger and acquisitions, and even a dual listing in Singapore, he said, adding that this would enhance the group’s profile since many oil majors and multinational corporations had their businesses rooted in Singapore.
Benalec hoped that the income generated from the storage leased out by tank terminal would be its future revenue stream, while it explored other methods to boost its recurring income by promoting its land at TPMIP and Pengerang Maritime Industrial Park.
“We will be exploring outright sales, upfront leases, annual leases and joint ventures with potential partners depending on their requirements,” he added.
Going forward, Leaw opined that with the present market condition, it would be appropriate to make investments now that raw material prices were at their lowest.
Taking into consideration the growth in energy and its demand in South-East Asia in the coming years, he believed the projects in Johor would lead to more inflow of foreign investments into Malaysia.