Boon Koon Group Makes Foray Into Property Development

Boon Koon Group Makes Foray Into Property Development

PETALING JAYA, 3 June: Boon Koon Group Bhd has proposed to diversify into property development following the proposed joint development to develop a serviced apartment named Aera Service Residence in Petaling Jaya.

Under a joint development agreement dated June 29, 2017, the group’s wholly owned subsidiary BKG Development Sdn Bhd and Platinum Eminent Sdn Bhd (wholly owned subsidiary of Aera Property Group Sdn Bhd) will develop the project comprising 752 units of service apartments, 13 retail units and carpark on 12,492 sq m of leasehold land.

In a filing with Bursa Malaysia yesterday, the group said the project has a gross development value of RM306.1 million and gross development cost of RM212.6 million.

BKG is required to pay Platinum Eminent an upfront participation fee of RM20 million and in return, it will be entitled to 60% of the gross development profits of the project estimated at RM93.5 million.

Platinum Eminent commenced piling and foundation works since June 2016 and the project is about 5% completed as of June 1, 2017. The entire project is expected to be completed by March 2021.

With the proposed joint development, Boon Koon said the property development business may contribute up to 25% of the net profits and/or net assets of the group and has proposed to diversify into property development to diversify its earnings base.

The group is principally involved in manufacturing, including rebuilt commercial vehicles, reconditioned commercial vehicles and body works, trading and reselling of commercial vehicle accessories as well as financing and insurance services and technical and administrative services.

The group said its property development business will be spearheaded by its executive director Yeo Chun Sing, who has 27 years of experience in the property development and construction industry.

In addition, the group has also proposed to undertake an issuance of up to 55.35 million special issue shares to independent third party investor(s) to be identified later.

Based on an indicative issue price of 40 sen per share, the proposed special issue of shares is expected to raise up to RM22.14 million, of which RM10 million will be used to fund the participation fees of RM20 million, RM11.64 million for future property projects and RM500,000 to defray expenses related to the proposals.

The proposals are subject to approvals from Bursa Securities, Boon Koon shareholders, the existing chargee in relation to Platinum Eminent entering into the joint development agreement and any other relevant authorities.

M&A Securities Sdn Bh has been appointed as the principal adviser to Boon Koon while Strategic Capital Advisory Sdn Bhd has been appointed as the independent adviser. The proposals are expected to completed by the second half of 2017.

— THE SUN

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