Sime Darby Property (Bukit Raja) Sdn Bhd (SDP Bukit Raja) and INTA Development Sdn Bhd are selling numerous land lots in Petaling Jaya to TWL Holdings Bhd's indirect units for a total of RM45 million.
Upon completion of the acquisitions, TWL and the indirect subsidiaries (TWL Group) propose to construct three affordable housing developments under the Rumah Selangorku scheme.
The total gross development value and gross development cost of the three projects taken together are anticipated to be RM624 million and RM523.5 million, respectively, according to a filing made with Bursa Malaysia yesterday.
TWL said the GDC for each project is anticipated to be incurred during a three-year development period.
According to the filing, the GDC is anticipated to be funded internally (including through proceeds from the sale of the project's residential units), through bank borrowings, and/or by potential future fund-raising initiatives.
"In this regard, the company is planning a rights issue exercise," it said in the filing.
TWL said the purchases are anticipated to have a favourable impact on the group's future profitability through the project profits.
A novation cum supplemental sale and purchase agreement (SPA) was signed by Tinta Kaca Development Sdn Bhd, an 80 per cent subsidiary of TWL Commodity Sdn Bhd and a wholly-owned subsidiary of TWL, to purchase a vacant plot of freehold land fronting Jalan Subang Mas in Taman Pinggiran USJ for RM10 million (EN10 project).
Another 80 per cent subsidiary of TWL Commodity, Tinta Heights Development Sdn Bhd, has entered into a separate novation cum additional SAP with the developer to purchase a vacant residential plot likewise fronting Jalan Subang Mas, Taman Pinggiran USJ, for RM12 million (EN11 project).
Alma Land Development Sdn Bhd, a 70 per cent-subsidiary of TWL Commodity, has also entered into a novation cum supplemental SAP agreement with SDP Bukit Raja and INTA to acquire a parcel of freehold residential land fronting onto Persiaran Putra Perdana, Putra Heights, for RM23 million (HT4 project).
According to TWL, the purchase terms were decided upon after taking into account the lands' total market value, which was estimated to be worth RM50 million (on an as-is basis) and RM52.68 million (assuming the projects' development orders have been obtained from the Subang Jaya City Council [MBSJ]), based on a valuation report created by an independent property valuer).
"The purchase considerations represent a discount of 10 per cent to the total market value of the lands on an is basis, and 14.58 per cent to the total market value of the lands assuming the development orders for the projects have been obtained from MBSJ," it said.
Sime Darby Property Bhd is the sole shareholder of SDP Bukit Raja, which in turn, is the beneficial owner of the lands.
According to the filing, INTA holds the principal SPAs for the three parcels of land. It entered into the SPAs with SDP Bukit Raja on March 24, 2022.
"Further to the above, INTA has now entered into the respective novation agreements with SDP Bukit Raja and the acquiror companies. INTA agrees to irrevocably novate and transfer all its rights, title, interest liabilities, and obligations in and to the respective principal SPAs to the acquiror companies," TWL said.
According to the filing, TWL Group intends to construct a total of 715, 746, and 1,139 low-cost/affordable housing units for the EN10, EN11, and HT4 projects, respectively.
Each housing unit costs between RM150,000 and RM250,000.
