Bolton in final phase of shift to pure property play

KUALA LUMPUR: Bolton Bhd is in the final phase of restructuring with plans to dispose of RM150 million of non-core assets, the proceeds of which will be used to fund its property projects in the Klang Valley.

Its executive chairman Datuk Azman Yahya said the proposed disposal of its 20.01% stake in Symphony House Bhd could be completed by January next year while there were currently no potential buyers for Campbell Complex in Jalan Dang Wangi here.

Bolton has sold its quarry and premix businesses for RM6.5 million cash while its construction and engineering segment was being wound down and would be fully exited by the end of next year. It also wants to sell Langkawi Fair for at least RM45 million.

Speaking to reporters after its EGM here yesterday, Azman said its gearing had dropped to 0.6 times now and would go down further to 0.5 times upon the completion of the proposed disposal of Hotel Midah in Cheras for RM26 million.

Bolton has changed its focus purely on property development and it is looking for joint venture partners for more property projects.

“We will manage our risks by bringing in JV partners, by launching property products fast and by selling properties at a good margin,” Azman said.

He said Bolton’s order book currently stood at RM3 billion and 75% of that could be realised in the next 24 months. The group currently has a total land bank of 900 acres.

“The main GDV comes from the four-acre Mayang project near KLCC (with a gross development value of RM1.5 billion). Both the Mayang project and Seremban’s Jalan Bukit Ceylon project (GDV of RM100 million-120 million) will be launched by the end of next year,” he said.

Mayang’s selling price will be above RM1,000 per square feet. Its Bandar Amanjaya township in Sg Petani have a remaining 700 acres with a GDV of about RM400 million to RM500 million. It is selling at an average of RM30 million to RM40 million annually over a seven-year period.

Azman said Bolton’s property projects had profit margins of between 20% and 30%. He said Bolton planned to hit a RM5 billion GDV in the next two years through acquisition of land banks and the group planned to buy high value land banks that could be taken up quickly.

“We soft launched The Surin condominiums project (GDV of RM170 million) in Tanjung Bungah, Penang last Saturday. The official launch will be end of this year. Of the 198 units launched last week, we sold 99 units.

“Once we have sold 80% of the 198 units, we will launch another block of the 198 units condos. Selling price for these condos is between RM250,000 and RM700,000,” he added.

Bolton foresees a double digit growth in its operating profit in FY08 from sales of property, reduced borrowings and the raising of of the selling prices of its properties.

By The EDGE (By Lim Yu Min)