Boustead plans non-core assets sale

CONGLOMERATE Boustead Holdings Bhd plans to sell assets that are not part of its core business, as well as those that are not performing to pare debts, its chief said.

The group has business in plantation, banking, property, manufacturing, trading and heavy industries.

It has also started preliminary talks to buy plantation land in Sabah, Sarawak and Peninsular Malaysia, group managing director Tan Sri Lodin Wok Kamaruddin said.

Plans to expand the asset size of its 53.4 per cent owned property trust, Al-Hadharah Boustead REIT, are also on the cards this year.

He said Boustead will trim its gearing to below its shareholders' fund by the year-end through asset sale. A buyout offer for its 65 per cent-owned property unit will boost its gearing ratio to slightly above one.

"Some shareholders were a little concerned about our gearing, since we need to pay a bit for those who opt for cash (in the takeover)," Lodin said in Kuala Lumpur yesterday after securing shareholders' nod to buy out the unit.

Shareholders of Boustead Properties Bhd can opt for RM5.50 cash per share, a share swap into Boustead, or a combination of both. Boustead Holdings may need to spend up to RM400 million if all shareholders take up the cash offer.

It has so far controlled 86 per cent of the property firm, whose shareholders have until an extended July 10 deadline to respond to the offer. It will need at least a 97 per cent acceptance before it can compulsorily buy the rest of the shares.

Datuk Ghazali Mohd Ali, the group divisional director for property, said its property developments may generate another RM500 million salesfor the rest of this financial year. This will likely come from the sale of condominiums in Mutiara Damansara and some corporate lots, he said.

The property division generally sells about 600 to 700 units each year and it has done half of the amount so far this year.

The flagship developments of Boustead Properties include the Mutiara Damansara in Selangor and Mutiara Rini in Johor.

By New Straits Times (by Chong Pooi Koon)