KUALA LUMPUR: Berjaya Property Bhd said its wholly-owned subsidiary Alam Baiduri Sdn Bhd has entered a joint venture with Trusmax Investment Co Ltd, a wholly-owned subsidiary of China's Wanli Tire Co Ltd, to undertake an automotive tyre manufacturing business in Malaysia.
It said in a stock exchange filing the scope of the partnership will include the research, development, design, manufacture and sale of automotive tyres and related spare parts and components as well as the provision of after-sales services, via a new joint venture company.
Under the terms of the deal, Alam Baiduri will own a 30% stake in the JV company, while Trusmax will hold the remaining 70%.
The parties estimate that about RM1.3bil in funds would be required to set up the automotive tyre manufacturing plant. Of the amount, RM813.5mil (63%) will be funded by the shareholders via equity contributions, while the remaining RM491.45mil (37%) will be financed through borrowings.
For its part, Alam Baiduri will contribute RM125.7mil cash to the JV company, and inject a 67.9-acre parcel of freehold land at an agreed value of RM118.31mil, for a total capital contribution of RM244.01mil.
The value of the land was arrived at after taking into consideration certain construction
works as well as land conversion and subdivision costs to be undertaken by Alam Baiduri, estimated to be about RM60mil.
The group will fund the RM125.7mil cash contribution, as well as the RM60mil construction and land costs via internal funds and borrowings.
