PETALING JAYA: Malaysian Resources Corp Bhd (MRCB) is buying out the Employees Provident Fund’s (EPF) 80% stake in Bukit Jalil Sentral Property Sdn Bhd (BJSP) for RM1.58bil, ending their stalled joint venture and giving MRCB full control to reshape the project.
In a filing with Bursa Malaysia, MRCB said its wholly-owned subsidiary Rukun Juang Sdn Bhd (RJSB) had on Sept 8 entered into a share sale agreement with the EPF’s unit Tanjung Wibawa Sdn Bhd to acquire 8 million ordinary shares and 1.13 billion redeemable preference shares in BJSP.
As at Aug 15, RJSB already owned 20% of BJSP.
“Upon completion of the proposed acquisition, BJSP will become an indirect wholly-owned subsidiary of MRCB,” it said.
BJSP, incorporated in 2017 and principally involved in property development, owns three parcels of leasehold commercial land in Bukit Jalil measuring 308,840 sq m in total.
These lands have a 99-year leasehold tenure expiring in December 2116.
The land parcels have a combined net book value of RM1.49bil.
However, according to a valuation dated July 10 by IVPS Property Consultant Sdn Bhd, they are worth RM2.06bil.
MRCB said the RM1.58bil purchase price was determined on a “willing-buyer willing-seller basis”, after considering KPMG Corporate Advisory Sdn Bhd (KPMG) adjusted net asset valuation of RM1.57bil.
It said the deal represents only a slight premium of RM5.1mil or 0.32% to KPMG’s valuation.
The acquisition also entails shareholder advances of RM69.2mil previously extended by EPF’s unit to BJSP, which MRCB may have to assume if BJSP does not repay them.
MRCB said the acquisition will be funded through a mix of internal funds and borrowings.
Assuming MRCB secures borrowings of RM1.32bil to partially finance the deal and settle shareholder advances, its net borrowings will rise to RM3.58bil, bumping up net gearing ratio from 0.27 to 0.61 times, the group noted in the filing.
On earnings, the group said the pro forma impact would see its financial year ended Dec 31, 2024 (FY24) earnings per share rise from 1.43 sen to 2.37 sen, while net assets per share would increase from RM1.03 to RM1.06.
BJSP was initially a joint venture between MRCB and EPF to develop a mixed-use project comprising office towers, hotels, retail shops, serviced apartments and residential towers.
However, the original plan stalled due to pandemic-related disruptions and cost escalations.
“As there has been no progress and since it has not proceeded as initially planned, the parties have been considering alternatives, including revision(s) to the initial planned mixed development but could not come to any conclusive decision on this matter,” MRCB said.
MRCB said it is reassessing the project and may revise the property mix to suit market demand and financing needs, with the possibility of adding data centres.
It noted that the land’s strong connectivity and proximity to the Malaysian Research Accelerator for Technology & Innovation (MRANTI) Park could make it attractive for data centre operators.
“With the escalating demand for such facilities, data centre operators are actively exploring nearby alternative lands, thereby significantly enhancing interest in the Lands. The lands can serve as an enlarged hub to the vibrant and collaborative communities in MRANTI,” it added.
Still, MRCB stressed that feasibility and environmental studies will be carried out before any development.
“For the avoidance of doubt, MRCB will only finalise the development plans for the lands upon completion of the proposed acquisition and after gaining full control over the lands,” it added.
Because EPF is both the vendor and a substantial shareholder of MRCB, with a 36.2% stake, the acquisition is deemed a related-party transaction.
Kenanga Investment Bank Bhd
has been appointed as an independent adviser to assess the fairness of the deal.
The acquisition is subject to shareholder approval at an extraordinary general meeting, as well as regulatory and contractual consents.
It is expected to be completed by the second quarter of 2026.
