Joint Venture between Bina Puri Properties Sdn. Bhd., a wholly owned subsidiary of Bina Puri Holdings Bhd. (“BPHB”) and LakeHill Resort Development Sdn. Bhd., a wholly owned subsidiary of Malaysia Pacific Corporation Berhad (“MPC”) for the development of residential houses on the land measuring approximately 24.41 acres located at Mukim Plentong, Johor Bahru, Johor Darul Takzim (“Proposed JV”)
1. INTRODUCTION
The Board of Directors (“the Board”) of BPHB is pleased to annonunce that Bina Puri Properties Sdn. Bhd. (“BP Properties or “the Developer”) had on 26 May 2015 entered into a Joint Development Agreement (“the JDA”) with LakeHill Resort Development Sdn. Bhd. (“LakeHill” or “the Landowner”) (jointly referred to as “the JV Parties”) for the development of residential houses on the land measuring approximately 24.41 acres located at Mukim Plentong, Johor Bahru, Johor Darul Takzim (“the Land”) (“the Project”).
The JDA was entered into on a joint-venture basis between BP Properties as the Developer and LakeHill as the Landowner subject to and upon the terms and conditions of the JDA.
2. DETAILS OF THE JV PARTIES
2.1 Details on BP Properties
BP Properties was incorporated in Malaysia as a private limited company under the Companies Act, 1965 on 6 August 1992.
The authorised share capital of BP Properties is Ringgit Malaysia Twenty-Five million (RM25.0 million) divided into 25 million ordinary shares of RM1.00 each. The present issued and fully paid-up share capital of BP Properties is Ringgit Malaysia Twelve million (RM12.0 million) comprising twelve million ordinary shares of RM1.00 each. The principal activity of BP Properties is property development and property management.
BP Properties is a wholly owned subsidiary of BPHB, a public limited company incorporated in Malaysia under the Companies Act 1965.
The directors of BP Properties are Tan Sri Datuk Seri (Dr) Foong Cheng Yuen, Tan Sri Datuk Tee Hock Seng, JP, Dr Tan Cheng Kiat, Matthew Tee Kai Woon, Datuk Tee Hock Hin, Tee Hock Chun and Ng Keong Wee.
2.2 Details on LakeHill
LakeHill was incorporated in Malaysia as a private limited company under the Companies Act, 1965 on 8 January 2004.
The authorised share capital of LakeHill is RM500,000.00 divided into 500,000 ordinary shares of RM1.00 each. The present issued and fully paid-up share capital of LakeHill is Ringgit Malaysia Three Hundred and Fifty Thousand (RM350,000.00) only comprising 350,000 ordinary shares of RM1.00 each. The principal activities of LakeHill are property management and property development.
The directors of LakeHill are Ch’ng Soon Sen, Datuk Shamsuddin bin Haji Tahir, Dato’ Sri Syed Hussien Bin Abd Kadir, Dato’ Ahmad Kamal Bin Abdullah Al-Yafii (Alternate Director to Datuk Shamsuddin Bin Haji Tahir), Datin Kong Yuk Chu and Mohd Faridz Bin Mohd Noor.
3. INFORMATION ON THE LAND
The Land is geographically located at Lot 95832 within Taman Nusa Damai, in the Mukim of Plentong, District of Johor Bahru and State of Johor Darul Takzim.
The details of the Land are as follows:
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Particulars
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Beneficial owner
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LakeHill Resort Development Sdn Bhd
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Title details
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Geran No. 293584 Lot No. 95832
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Lot number and location
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Lot No. 95832, Mukim of Plentong, District of Johor Bahru, State of Johor Darul Takzim
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Land area
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approximately 24.41 acres
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Land tenure
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Freehold
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Existing usage
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Vacant Land
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Proposed usage
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Two (2) storey terrace houses
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Market value appraised by independent registered valuer
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Average RM 19 per sq. foot. as per valuation report issued by Hakimi & Associates Sdn Bhd on 27 March 2013
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Encumbrances
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Free from encumbrances
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4. SALIENT TERMS OF THE JDA
4.1 Agreement for the Joint Venture
The Developer shall be responsible for submission, approvals, surveys, the issue of titles, technical know-how, skills, expertise, consultancy and other services for the Project including the overall planning, design, finance, construction of the Project, management and marketing thereof.
The Landowner will provide and/or make available the Land to the Developer for the Project and shall render reasonable assistance and do all such reasonable acts and things necessary for the Project.
Each Party shall co-operate with the other Party and act in fairness and in good faith to enable the other to discharge its duties under this agreement, and accordingly will respond promptly to requests properly made by the other for approvals, information or assistance.
Based on the preliminary planning stage, the estimated gross development value (“GDV”) is approximately RM204 million. The estimated GDV is subject to changes and the Company is unable to disclose specific details of the Project as the Project’s layout/building plan is still pending finalisation.
4.2 Landowner’s Entitlement
The Landowner shall be entitled to payment of the land cost at a sum of RM21,265,991.32 (RM 20 p.s.f) and twenty percent (20%) of the project profit (“Agreed Proportion”).
The payment schedule of the land cost shall be at such times and in the manner as agreed by the JV Parties. The payment for Landowner entitlement on twenty percent (20%) of the project profit shall be paid by the Developer to the Landowner after the 14 days of the Completion Date.
Any units unsold as at the Completion Date shall be distributed to the JV Parties in the Agreed Proportion.
4.3 Conditions Precedent
The Proposed JV is conditional upon, inter-alia, the fulfillment of the following conditions precedent:
4.3.1. upon a new Development Order, if required, and Building Plan being obtained by the Developer;
4.3.2. either party will be entitled to terminate the JDA by giving notice to that effect to the other party in the event the clause 4.3.1 as above has not been obtained by the cut-off date, the date falling 18 months from the date of JDA;
4.3.3 in the event the JDA is terminated in accordance with clause 4.3.2 as above, the Landowner will refund or cause to be refunded, without interest, any monies received by it under the JDA provided the failure is not due to reasons attributable to the Developer and thereafter neither party will have further obligation under the JDA to the other party, save in respect of any rights or obligations which have accrued in respect of the provisions of the JDA to either party prior to such termination; and
4.3.4. the JDA will become unconditional on the day after the Developer’s Solicitors receive notification of the grant of the building plan.
4.4 Estimated Time Frame for Completion of the Joint Development
The estimated time frame for completion is the day falling 6 years from the Unconditional Date or the date the certificate of completion and compliance for the Units are issued, whichever is later.
5. RATIONALE AND BASIS ARRIVING FOR LANDOWNER’S ENTITLEMENT
The Proposed JV would allow BP Properties to jointly develop the land and generate income to enhance shareholders’ value.
The Landowner’s Entitlement was arrived at on a willing-buyer willing-seller basis after taking into consideration, amongst others, the following:
- the market value of the Lands of RM19.00 per sq.ft., as ascribed by an independent registered valuer Hakimi & Associates Sdn Bhd dated 27.03.2013; and
The Proposed JV is expected to contribute positively to the earnings of BPHB in the future.
6. EFFECTS OF THE PROPOSED JV
6. 1 On Share Capital and Substantial Shareholders’ Shareholding
The Proposed JV will not have any effect on the share capital and substantial shareholder’ shareholding in BPHB.
6.2 On Earning and Net Assets (“NA”)
The Proposed JV is not expected to have any material impact on BPHB Group’s earnings and NA for the financial year ending 31 December 2015. However, the Proposed JV is expected to contribute positively to the future earnings and NA of BPHB.
6.3 Gearings
The Proposed JV is not expected to have any material effect on the gearing of BPHB for the financial year ending 31 December 2015.
7. FINANCING/SOURCE OF FUNDS
The Parties have agreed that the Developer shall, at its own cost and expense, execute and complete the Project in accordance with the terms and conditions of the JDA.
The Developer shall use its best endeavour to obtain Project Financing and Landowner agrees to charge the Land as security for Project Financing provided payment of the Land Cost and Owner’s Entitlement is guaranteed by BPHB.
8. RISK FACTORS
The Board is not aware of any risk factors arising from the Proposed JV other than the normal business, market and global economic risks.
9. APPROVALS REQUIRED
The Proposed JV is not subject to the approval of shareholders of BPHB but is subject to the approval of the relevant authorities.
10. PERCENTAGE RATIOS
The highest percentage ratio applicable for the Proposed JV, pursuant to Chapter 10 of the Main Market Listing Requirements of Bursa Malaysia Securities Berhad is 10.98%.
11. INTEREST OF DIRECTORS’ AND/OR MAJOR SHAREHOLDERS’ AND/OR PERSONS CONNECTED WITH THEM
None of the Directors and/or major shareholders of BPHB and persons connected to them have any interests, direct or indirect in the Proposed JV.
12. DIRECTORS' STATEMENT
After having considered all aspects of the Proposed JV, the Board is of the opinion that the Proposed JV is in the best interest of the Company.
13. DOCUMENT AVAILABLE FOR INSPECTION
The JDA is available for inspection at the registered office of BPHB at Wisma Bina Puri, 88 Jalan Bukit Idaman 8/1, Bukit Idaman, 68100 Selayang, Selangor during normal office hours from Monday to Friday (except public holidays) for a period of three (3) months from the date of this Announcement.
This announcement is dated 26 May 2015.
