PETALING JAYA: Malaysian Resources Corp Bhd (MRCB) will continue with its asset monetisation to pare down debts and maintain dividend payouts of 20 per cent of core earnings to shareholders, said executive director Mohd Imran Mohamad Salim.
“After the first tranche of share placement exercise in April 2016, MRCB’s gearing is pared to 1.12 times,” he told reporters after the company's shareholders meeting held here today.
“This is a marked improvement from a very indebted level of 1.73 times, back in December 2013. Over the years, we have been de-gearing via asset monetisation,” he said.
In October 2015, the Youth and Sports Ministry awarded to MRCB’s subsidiary Rukun Juang Sdn Bhd (RJSB) a RM1.6 billion job to redevelop the Bukit Jalil Sports Complex into KL Sports City.
In return for undertaking the redevelopment, RJSB will receive three parcels of land near the Bukit Jalil Sports Complex, measuring 11.38ha, 7.12ha and 18.94ha.
The RM1.6 billion project is being carried out in two phases. The first phase (from January 2016 to June 2017) costing RM499 million involves getting the Bukit Jalil National Stadium ready to host the 2017 SEA Games.
During this phase, RJSB will also carry out works on Putra Stadium, the National Aquatic Centre and the National Hockey Stadium, improve integration to the current transportation links and increase pedestrian access throughout the site.
Two months ago, it was reported that the Employees Provident Fund, which holds 38 per cent in MRCB, offered to buy 80 per cent of RJSB’s stake in one of three parcels of land, for RM421.5 million.
“This offer by our parent EPF is a form of land fund structuring. It doesn’t mean EPF is funding for the Bukit Jalil project,” he said.
Imran reiterated MRCB is able to self-finance the RM1.6 billion regeneration of the Bukit Jalil Sports Complex. “We can generate funds internally and borrow money from the banks.”
Imran assured that MRCB, while having relatively high gearing, is committed to paying out dividends to shareholders. “MRCB’s dividend policy is set at 20 per cent of core earnings.”
He went on to say MRCB’s earnings is stable, having secured a slew of sizeable jobs involving the LRT 3 and MRT 2. “Our construction orderbook alone is at RM6.5 billion.”
Apart from the redevelopment of Bukit Jalil Sports Complex into KL Sports City, Imran said MRCB is also busy with the development of Cyberjaya City Centre and Kwasa Sentral Commercial Centre. These long term projects yield an estimated gross development value of nearly RM20 billion.
Also present at the media briefing were MRCB chief operating officer Kwan Joon Hoe, chief financial officer Ann Wan Tee and chief corporate officer Amarjit Singh Chhina.
Last year, it was reported MRCB’s property sales fell to RM597 million, just over half of RM1.1 billion garnered in 2014. Kwan, however, expressed optimism sales momentum should pick-up again this year.
“We’ve set an internal sales target of RM1 billion this year,” Kwan said, adding launches in the months ahead include new phases for 9 Seputeh, Sentral Suites at KL Sentral and affordable homes in Kajang.