Friday 29 Mar 2024
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KUALA LUMPUR (Dec 21): Malaysian Resources Corp Bhd (MRCB)'s executive director Mohd Imran Mohamad Salim said that it is a continuous effort for the group to simultaneously grow its business yet pare down debts that stood at 1.13 times its equity.

After MRCB's extraordinary general meeting (EGM) today, Mohd Imran told reporters that the group has been in talks with Indonesian and Thai companies to enter the property and construction businesses there.

He said the talks were indeed serious, and MRCB was looking at executing a deal with parties in Indonesia and Thailand sometime in 2017.

"I would say that (year) 2016 would be the year where we would have to still conduct negotiations, feasibility studies and also [study] the local statutory rules there. We should see this to bear fruit in 2017," Mohd Imran commented.

Being both a property developer and a construction company, Mohd Imran said MRCB was working on getting something in Thailand and Indonesia for both its business ventures.

He, however, cannot name the local parties MRCB has been talking to due to confidentiality agreements.

Meanwhile, MRCB, which was saddled with debts of RM3.06 billion, was open to selling the Eastern Dispersal Link (EDL) highway in Johor, said chief financial officer Ann Wan Tee.

"If there is any attractive offer tabled, then we'll take it," he said.

Mohd Imran added that, however, the focus now is on restructuring EDL's debts.

The highway, which was completed in 2012, had RM1.21 billion of outstanding debts.

In total, MRCB's net borrowings stood at 1.13 times of its RM2.27 billion in shareholders' fund as at the end of the third quarter of its financial year ending Dec 31, 2015 (3QFY15).

After Mohd Imran's father Tan Sri Mohamad Salim Fatih Din's Gapurna group took over MRCB's management in 2013, MRCB has been undertaking many developments and major construction projects — chiefly the revamp of Bukit Jalil National Sports Complex into a self-sustaining Kuala Lumpur Sports City and co-heading the third Light Rail Transit (LRT 3) construction.

Analysts have expressed concerns about whether the group's high ambitions can be achieved on the back of its high debt legacy issue, given the high cash flow requirements to undertake these projects.

"Efforts are being made. We need to strike a balance between growing our business and paring down our debts simultaneously. We can't be doing one thing at a time," Mohd Imran said.

The EGM today was to obtain shareholders' approval of a 20% MRCB share placement. While Mohd Imran said the main objective of this exercise is to increase MRCB's bumiputera equity ownership — so that it can tender for more Bumiputera project tenders — the share placement will also indirectly trim some of its gearing level.

(Note: The Edge Research's fundamental score reflects a company's profitability and balance sheet strength, calculated based on historical numbers. The valuation score determines if a stock is attractively valued or not, also based on historical numbers. A score of 3 suggests strong fundamentals and attractive valuations.)

 

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