Property developer and integrated facilities management group Damansara Realty Berhad (DBhd) is planning to raise up to RM15.9 million in a private placement to support its business expansion and revival of their bauxite mining activity.
DBhd said the bulk of the capital raised over RM12.8 million will finance their Integrated Facilities Management (IFM) segment expansion, including international parking management business in the Philippines. DBhd currently has a cumulative tender book value amounting to RM653.67 million, from various IFM project bids.
In addition, the balance of the funds raised will go towards working capital and environmental impact assessment (EIA) expenses to recommence its bauxite mining activity under its subsidiary, Damansara Realty Pahang Sdn Bhd (DRP). This follows the lifting of the moratorium on bauxite by the Ministry of Water, Land and Natural Resources earlier in March this year.
The private placement of up to 10 percent of DBhd’s share capital will involve the issuance of up to 31.8 million new shares, it said in a filing to Bursa Malaysia today. DBhd has appointed M&A Securities Sdn Bhd as the adviser and placement agent for the proposed private placement, which is expected to be completed by June 2019.
"This private placement will provide us with the additional resources to meaningfully advance our strategic plans to enhance the long-term growth of the company and value for our shareholders,” said Group Managing Director Ts. Brian Iskandar Zulkarim.
“With our sustained profitability streak, we believe the timing is right for us to recommence bauxite mining. We’re now in strong position to realise the potential of our bauxite reserves, which can be a viable income contributor to supplement our core businesses in the coming years.” he said.
DBhd’s subsidiary Damansara Realty (Pahang) Sdn Bhd (DRP) has about 500 acres of bauxite-rich land in Beserah, outside Kuantan with estimated reserves of more than 5 million metric tonnes. The Group is currently waiting for approval from the authorities to commence their bauxite mining activity.
“We will continue to observe all laws and regulations as we always have done and will submit the required Environmental Impact Assessment studies and any process as required by law or regulation prior to commencement. Pollution prevention has been and will continue to be our top priority,” Ts. Brian added.
This month, the Group announced a 20 percent jump in net profit to RM2.3 million. This was driven largely by strong organic growth and recurring income from its Integrated Facilities Management (IFM) segment. DBhd also saw its first-quarter operating profit up by 2.5 percent to RM3.7 million, on revenue of RM71.29 million.
Its subsidiary DAC Land Sdn. Bhd. (DACL) had recently partnered with Active Estates Sdn Bhd (AESB) to jointly develop its commercial project Aliff Square 3 in Tampoi, Johor worth an estimated gross development value (GDV) of RM180 million. This partnership is part of DBhd’s long term strategy to form strategic alliances as a key enabler in delivering continued growth by scaling up and expanding the size and scope of its offerings.