KUALA LUMPUR: EcoFirst Consolidated Bhd is acquiring the remaining 49 per cent stake in BCM Holdings Sdn Bhd to fully own the 1.69-hectare freehold land in Sungai Besi for RM78.4 million.
A filing with Bursa Malaysia today showed that EcoFirst had signed a conditional share sale agreement with Tan You Tiong for the acquisition.
Upon completion, BCM will become a wholly-owned subsidiary of EcoFirst.
EcoFirst group chief executive officer Datuk Tiong Kwing Hee said the acquisition of the remaining stake in BCM would give the company full ownership of the land.
"This will allow the company to enjoy the full benefit of its strategic location at the fringe of KL city centre.
"We are optimistic about the prospects of the development plans at BCM Properties, and the strong take-up rate during the recent soft launch has been convincing.
"We expect to see further improvement as and when the property market gradually recovers," he said in a statement today.
Upon completion of the development on the land, EcoFirst is expected to generate a strong positive net cash flow of RM288 million.
EcoFirst said with a healthy balance sheet coupled with strong positive cash flow to be generated from the development of the land, the company is confident that it should be able to start declaring some dividends commencing the financial year ending May 31, 2023 (FY23).
Meanwhile, Tiong said the full ownership of BCM will allow EcoFirst to fully consolidate the financial performance and facilitate easier decision-making and direction for the project.
He said the estimated gross development value (GDV) of the intended development of BCM Properties amounts to RM1.0 billion, while the estimated gross development cost (GDC) amounts to RM620 million, and the expected gross profit of RM380 million.
"EcoFirst is funding the development costs for BCM Properties via bank borrowings.
"Being a wholly-owned subsidiary of EcoFirst, the company will be able to save costs for the development.
"The company believes that the development of BCM Properties will contribute positively to the financial performance of the group as seen by the initial interest in the property project," he said.