MAIN Market-listed property developer DPS Resources Bhd has entered into a related party transaction (RPT) to develop a few parcels of land measuring circa 52.186 acres in Melaka as a mixed development project.
The project, which boasts an estimated gross development value (GDV) of RM200 mil, will be undertaken by the company’s wholly-owned subsidiary Shantawood Sdn Bhd which has entered into a joint development agreement (JDA) with Biotrend Asia (M) Sdn Bhd for the purpose.
As the developer of the Melaka land, Biotrend shall grant Shantawood the rights to carry out the development in exchange for total consideration average of 3% from the total GDV estimated at RM200 mil.
“In view of the interest of certain directors and major shareholders of DPS in the proposed joint development, the project is deemed a RPT pursuant to Paragraph 10.08 of the Main Market Listing Requirements of Bursa Malaysia Securities Bhd,” the company said in a Bursa Malaysia filing yesterday (April 8).
“The financial commitment requirement for the implementation and completion of the project will be funded by a combination of internally generated funds and/or bank borrowings.”
Commenting on the JDA, DPS Resources’ managing director Edward Sow Yuen Seng said the collaboration reaffirms the group’s expansion efforts to increase its presence in property development, in particular the affordable residential housing segment.
“This mixed development project is anticipated to increase the revenue derived from DPS group’s property development business and contribute positively to the future earnings and profitability of the group,” he projected.
“The development land’s connectivity and accessibility to public amenities especially with the existing Sungai Udang-Paya Rumput-Ayer Keroh (SPA) Highway and the Alor Gajah-Central Malacca-Jasin (AMJ) Highway provides a significant potential for success in the proposed joint development.”
Above all else, the land plot is located just 10 minutes’ drive away from Melaka town and nestled within a matured residential and commercial area.
DPS Resources saw its net profit shrank 40% to RM4.8 mil in its 9M FY3/2022 ended Dec 31, 2021 (9M FY3/2021: RM7.97 mil) although its revenue rose 47.6%% to RM69.25 mil (9M FY3/2021: RM46.91 mil).
At the close of yesterday’s (April 8) trading, DPS Resources was up 1 sen or 8.7% to 12.5 sen with 3.04 million shares traded, thus valuing the company at RM88 mil. – April 9, 2022
