UEM Land to spend bulk of loan on Nusajaya

UEM Land Holdings Bhd, which was listed on the stock market yesterday, plans to use the bulk of a bank loan, or RM500 million, to develop its Nusajaya township in Johor next year, officials said.

The property developer is in talks with a group of five local banks for a RM850 million Islamic loan, managing director Wan Abdullah Wan Ibrahim said.

It hopes to close the deal by the end of the first quarter of 2009.

This would double UEM Land's total debt over equity ratio to 60 per cent, which is on par with the industry, he said.

UEM Land also plans to raise another RM400 million from a share sale later, when markets improve.
The company, which was listed on the main board in place of its parent UEM World following a group restructuring, made a commendable debut despite the overall weak market yesterday.

It opened five sen lower than its reference price of 55 sen, before moving to make gains

It ended the day 2.5 sen higher to 57.5 sen, off an intra-day peak of 80 sen. It was the day's most actively traded counter, with 47.8 million shares changing hands.

"We were prepared for (an opening) of below 50 sen this morning," chairman Tan Sri Ahmad Tajuddin Ali remarked after the opening bell. "This shows people want to get hold of UEM shares," he added.

Research house Hwang-DBS Vickers Research had earlier pegged the company's fair value at 45 sen.

UEM Land is 77.1 per cent owned by the UEM Group and 22.9 per cent by the public.

Wan Abdullah said the company had managed to get a time extension by the stock market regulator to meet the required public shareholding spread of 25 per cent.

Based on its reference price, it had a market capitalisation of RM1.3 billion, making it the country's fifth largest listed property developer, according to HwangDBS.

By Business Times (by Adeline Paul Raj)