Sunsuria invests in 3 real estate projects

KUALA LUMPUR: Sunsuria Bhd has entered into several agreements with its executive chairman Datuk Ter Leong Yap for stakes in three real estate companies.
The three real estate companies have on-going and upcoming developments in established strategic locations within the Klang Valley and Johor, namely Salak Tinggi and Setia Alam in Selangor and Medini in Johor.
The total cash funding required (net of reinvestment amount) for the proposals amounts to RM250 million, which will be funded via internally generated funds, funds from pre-approved fund raising exercises as well as bank borrowings.
The collective proposals, which are expected to be completed by the second quarter of 2015, will expand Sunsuria's existing land bank from 4.71 acres to 445 acres.
Taking into account the effective interest of Sunsuria in the projects arising from the proposals, this will translate into an effective GDV of RM4.5 billion for its future income stream.
The first transaction under the proposals involve a subscription of 1 million new shares of RM1 each in Sunsuria Gateway Sdn Bhd (SGSB) or a 99.99% stake, for a cash subscription of RM1 million together with a cash subscription of RM237 million of new redeemable preference shares.
The proposed SGSB subscription will accord Sunsuria a 50% stake in the Suria Serenia development, a joint venture mixed property development with Sime Darby Bhd at Salak Tinggi.
An amount of RM100 million from the proposed SGSB subscription will be used to redeem 10 million existing redeemable preference shares in SGSB.
Ter will reinvest this RM100 million into Sunsuria via the subscription of 102.04 million Sunsuria shares at an issue price of 98 sen per Sunsuria share, representing a premium of 14%.
For Sunsuria Medini Sdn Bhd (SMSB), the second transaction of the proposals involves two cash acquisitions of RM54.9 million comprising two shares of RM1 each of Concord Property Management Sdn Bhd, representing its entire 20% stake in SMSB for RM53 million, and a 1% stake in SMSB for RM1.8 million.
"Whilst the Sunsuria Medini acquisition only involves the proposed acquisition of a 21% stake in SMSB, such an investment will enable the company to participate in a property development project with a strategic partner from Japan, Creed Investments Pte Ltd, thereby offering Sunsuria the opportunity to explore international markets together with this new partner," Sunsuria said in a statement yesterday.
The third transaction of the proposals represents a proposed subscription of RM57 million in Rentak Nusantara Sdn Bhd (RNSB), which comprises a 99% stake in RNSB at a cash subscription price of RM25 million and a proposed subscription of 32 million new redeemable preference shares in RNSB for a cash subscription price of RM32 million.
All three proposals require shareholders' approval at a forthcoming EGM.
"These proposals are expected to contribute positively to the future earnings of the group for forthcoming financial years. Upon completion of the proposals, Sunsuria will immediately enjoy the positive earnings from the on-going development of Sunsuria Medini and Suria Hills."
Sunsuria is confident that their projects will do well in the mid to long term as they are located in prime areas and Suria Serenia specifically will benefit from existing and planned transportation infrastructure such as airports, ERL and highways.