Ivory Properties to jointly develop sewage treatment plants, KL land with Grand Uptown

KUALA LUMPUR (Nov 8): Penang-based Ivory Properties Group Bhd will jointly undertake the construction of sewage treatment plants on government and private land with Grand Uptown Sdn Bhd at a cost of RM49.6 million.

Under the proposed joint development, Ivory will also jointly develop a 20,330 sq m piece of leasehold land in Kuala Lumpur with Grand Uptown. The land will be given to Grand Uptown under a tri-partite agreement between the company, the government and landowner Syarikat Tanah and Harta Sdn Bhd, as a condition to undertake the construction of sewage treatment plants in return for the land.

In a filing with Bursa Malaysia today, Ivory Properties said its wholly-owned subsidiary Ivory Residence Sdn Bhd (IRSB) has entered into a joint development agreement (JDA) with Grand Uptown for the proposed project in return for the exchange land on which IRSB and Grand Uptown will jointly develop thereafter.

The JDA also grants Ivory Properties the sole and exclusive rights as developer to develop the exchange land.

Of the RM49.6 million construction cost, Ivory Properties will pay up to RM35 million, with Grand Uptown to bear and pay the balance sum for the proposed project.

"Ivory Properties shall [make] payments progressively to the appointed contractors and consultants upon receipt of the certificate from the architect for the project certifying the completion of the relevant stages of work for the project," it said.

Ivory Properties noted that its participation in the proposed joint development will be funded through internal funds or borrowings.

"The proposed joint development is in line with the group's strategic planning of expanding its reach outside Penang and participation in property development projects on joint basis to minimise the needs for land acquisition," it said.

The net gearing of Ivory Properties will be impacted by any successful arrangement for financing for the proposed joint development, it added.

The completion of the development on the exchange land will be 60 months from the date of the receipt of the commencement of work order or within such further extended time of 24 months upon the terms and conditions of the JDA.

Ivory Properties shares closed unchanged at 47 sen today, with a trailing P/E of 22.3 times. Its market capitalisation stood at RM230.3 million.