KUALA LUMPUR (Jan 22): Global Oriental Bhd has teamed up with Menteri Besar Incorporated (Perak) (MB Inc) to develop a mixed development in Manjung, Perak, which will have a gross development value (GDV) of RM900 million.

In a filing with Bursa Malaysia today, Global Oriental said its wholly owned subsidiary Johan Awana Sdn Bhd (JASB) and MB Inc have signed a development rights agreement (DRA) to undertake the development of the parcel of land measuring 147.84 acres that is owned by MB Inc into a mixed development of commercial and residential components.

"The group has continuously been on the lookout for good opportunities to expand its property development activities.

"The DRA provides an opportunity for MB Inc and Global Oriental Group to combine their resources and expertise to enhance the value of the development. The DRA is expected to contribute to the medium- and long-term profitability of Global Oriental Group," it added.

With a present issued capital of RM2, JASB will subsequently increase its paid-up capital by allotting shares in the proportions of 85% to Global Oriental and 15% to MB Inc.

Under the agreement, JASB will play the role of developer and is solely responsible for meeting the costs of the development, which Global Oriental said will be funded by internal funds and/or bank borrowings.

MB Inc will be entitled to a fixed sum of RM23.59 million, while JASB's entitlement is the GDV arising from the development, less RM23.59 million.

"The development is expected to be carried out and completed in phases over a period of 10 years with an extension of five years, subject to consent being obtained from MB Inc," said Global Oriental.

Global Oriental shares rose one sen or 2.13% to close at 48 sen today, for a market capitalisation of RM213.7 million.

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