PETALING JAYA: Eco World Development Group Bhd
’s (EcoWorld Malaysia) 81%-owned subsidiary Mutiara Balau Sdn Bhd (MBSB) has inked several agreements with Boustead Properties Bhd (BProp) and its sister companies for the acquisition of 10 parcels of freehold land, covering 847.249 acres in Semenyih, Selangor for RM742.4mil.
The proposed acquisition is to be developed into a mixed residential and commercial development known as Eco Forest 2, with an estimated gross development value of RM4.6bil.
The land is located next to the group’s Eco Forest township.
In a statement, EcoWorld Malaysia said the proposed acquisition would allow the group to replenish its residential land bank in the Semenyih corridor, extending the development life of its existing townships. It said the proposed development is also expected to contribute positively to the future earnings of EcoWorld Malaysia.
“The proposed land acquisition is expected to enhance the net assets of the group in the future given the potential future profit contribution arising from the proposed development,” it noted.
It is expected to be completed by the first half of 2025 (1H25).
They will be funded through a combination of internal funds and bank borrowings. “The exact breakdown of internal funds and bank borrowings will only be determined at a later stage after considering the group’s gearing level and cash requirements for its business operations,” it noted.
Currently, all 10 parcels of land are agricultural land.
According to EcoWorld Malaysia, the site is well positioned within a designated development area as its over 35-year-old palm trees are no longer suitable for productive use.
While EcoWorld Malaysia owns 81% of MBSB, the remaining 19% is held by BProp.
Both EcoWorld Malaysia and BProp will procure MBSB to appoint Eco World Project Management Sdn Bhd, a wholly-owned subsidiary of EcoWorld Malaysia, as the development manager for the proposed development.
Additionally, EcoWorld Malaysia will grant BProp a put option, allowing it to require EcoWorld Malaysia (or its nominee) to purchase BProp’s 19% stake in MBSB for RM147.62mil. “The put option is exercisable during the option period, which starts one year after the completion of the proposed land acquisitions and continues for a period of three months,” EcoWorld Malaysia noted.
Similarly, EcoWorld Malaysia held a call option to require BProp to sell its 19% stake under the same terms.
“Through the agreement, EcoWorld Malaysia will also have the opportunity to collaborate with BProp.
“Parties will be able to leverage on each other’s strengths and capabilities, working towards the completion of the land acquisitions and subsequent project development,” it added.
