DBE Gurney expanding affordable housing unit


  • Corporate News
  • Wednesday, 15 Jul 2020

In a statement yesterday, the group said it was buying two affordable housing township projects in Perak, namely, Bandar Baru Setia Awan Perdana (BBSAP) and Lagenda Teluk Intan (LTI) Blossom Eastland Sdn Bhd worth RM642.5mil.

PETALING JAYA: Perak-based DBE Gurney Resources Bhd, which will be known as Lagenda Properties Bhd, is expanding its affordable housing arm to meet the growing demand in the segment.

The group was previously in the poultry business before venturing into property development projects in Perak in 2018.

In a statement yesterday, the group said it was buying two affordable housing township projects in Perak, namely, Bandar Baru Setia Awan Perdana (BBSAP) and Lagenda Teluk Intan (LTI) Blossom Eastland Sdn Bhd worth RM642.5mil.

“The group will stand to benefit greatly from the acquisitions of both BBSAP and LTI as the demand for affordable housing is unmet by developers and the residential units of these two townships are priced below RM200,000, which is in the affordable range for B40 and M40 house-buyers, ” DBE said.

The acquisition will be satisfied through a new share issuance.

Yesterday, DBE received the green light from its shareholders to take on several corporate exercises that include a share consolidation, fundraising and acquisitions.

The company said that the approval from its shareholders to raise money from a private placement would lead to a healthier balance sheet, where RM108mil cash will be raised based on an indicative issue price of 80 sen.

The acquisition would involve three companies, including Blossom Eastland, for a total of RM823.31mil.

DBE said these three companies’ aggregated profit after tax in 2019 was approximately RM127mil, with margins ranging from 25% to 30%.

“Post-acquisition, DBE’s net gearing ratio will drastically reduce from 0.6 times to 0.2 times post-private placement, ” it said.

With the approval, DBE said its affordable housing development arm will be scaled up significantly with a remaining aggregate gross development value of approximately RM2.1bil and unbilled sales of RM514mil together with a sizeable landbank of around 1,200 acres to be developed.

“With the approval of the resolutions, DBE will become one of the biggest affordable housing developers in Malaysia. The management will now be fully focused as we streamline our business operations and work towards strengthening the group’s financial performance to the next level, ” said DBE managing director Datuk Jimmy Doh Jee Ming.

DBE closed unchanged at 3.5 sen yesterday.

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