Magna Prima to sell land for RM500mil

Magna Prima Bhd is looking to sell three pieces of its prime land by year-end, which should net it some RM500mil cash.

Using this cash, Magna Prima would buy smaller plots of land for property development and would set a policy of giving out 50% of profits from each project as dividends to shareholders, said Magna Prima group managing director Datuk Rahadian Mahmud Mohammad Khalil (pic).

The land it intends to sell include its prime Lai Meng school land, 20 acres in Shah Alam, and seven acres in Petaling Jaya.

The Lai Meng school land, which is located close to the Petronas Twin Towers, is currently worth RM350mil according to valuers. This is a significant appreciation from the price it paid when it acquired the land from Lai Meng Girls’ School Association (LMGSA) four years ago.

Magna Prima bought the land in March 2010 for RM148.2mil cash (or around RM1,350 per sq ft).

Rahadian said it was in the midst of appointing a property agent for the Lai Meng land. He added that the Shah Alam and Petaling Jaya land had also appreciated significantly from the time they were bought some five years ago.

Moving forward, Rahadian said Magna Prima was looking to develop smaller niche projects with a gross development value of RM200mil to RM300mil.

“We should complete two or three projects every year,” he said.

Magna Prima shares closed 2 sen up to RM1.14 on volume of 1.14 million shares.

Its current ongoing projects are The Boulevard Business Park in Jalan Kuching, and Desa Mentari near Bandar Sunway in Petaling Jaya. The change of fortune for Magna Prima is starting to show as a result of the completion of The Istana project in Melbourne. This was reflected in its first quarter earnings to March 31, 2015.

For the period, net profit was up 242.43% to RM64.57mil on the back of a 193.12% jump in revenue to RM390.58mil. The improvements were mainly contributed by the completion of The Istana project in Melbourne. Its cash position rose to RM127.48mil from RM18.45mil previously.

Meanwhile, its short term borrowings dropped to RM75.65mil from RM451.62mil in the previous quarter.

Out of the RM75mil, RM40mil is for the redeemable convertible preference shares (RCPS) issued to Lembaga Tabung Angkatan Tentera. Magna Prima is not allowed to repay the RCPS until six months from its issuance. Come June 23, Rahadian said Magna Prima would pay it off.

Its long-term borrowings stood at RM242.83mil from RM91.7mil previously. The bulk of these borrowings are for its existing land bank. - The Star