Bolton mulls RM300m Islamic bond sale

BOLTON Bhd, a medium-sized property developer, is considering raising up to RM300 million from an Islamic bond sale to buy land and fund existing projects, its chief says.

"We want to capitalise on the cheap cost of funds to build a war chest to fuel our growth, enhance financial flexibility and be financially ready to purchase a strategic landbank," executive chairman Datuk Azman Yahya told reporters after the company's annual general meeting yesterday.

Bolton, which aims to position itself as a "premier league" property developer, is interested in pursuing land in the Klang Valley and, possibly, Penang.

It has a land bank of some 283.5ha now which can potentially generate about RM3 billion in gross development value (GDV), he said.
The group plans to launch three high-end projects in Kuala Lumpur in this fiscal year with a total GDV of RM450 million.

These projects are expected to enhance its sales over three years to 2012.

For the last fiscal year ended March 31 2009, Bolton made a net profit of RM18.3 million, and it hopes to at least maintain that this year despite the property market still being relatively soft, Azman said.

"Even with reduced margins, and based on our unbilled sales of just over RM100 million, I think we should be able to maintain that," he said.

It made RM46.7 million in the previous year.

Azman explained that property developers are seeing margins coming down as construction costs have gone up again and buyers need to be provided with a lot of incentives.

"I think the heydays of developers making 40 per cent margins is gone. I don't think you'll ever see that again," he remarked.

The group avoids undertaking projects with margins of below 20 per cent, he said.

The three high-end projects it will focus on this year are the redevelopment of the Bolton Court apartments on Jalan Bukit Ceylon with a GDV of about RM153 million, and the final phase of the Tijani apartment project in Bukit Tunku with a GDV of RM110 million. Both are slated for launching in the final quarter of this year.

The third project is a 16-storey condominium, 51Gurney, on Jalan Persiaran Gurney in Kuala Lumpur, which features a unique "drive-to-your-doorstep" concept. This is expected to be launched in the first quarter of next year.

By Business Times (by Adeline Paul Raj)