AISB: In­come from prop­erty biz to start flow­ing late 2017

The Sun (Malaysia) - - SUNBIZ - BY WAN ILAIKA MOHD ZAKARIA

SHAH ALAM: Steel pipe man­u­fac­turer cum prop­erty de­vel­oper Amal­ga­mated In­dus­trial Steel Bhd (AISB) said its prop­erty devel­op­ment busi­ness would pro­vide a re­cur­ring yearly in­come stream of RM1.94 mil­lion, from the fi­nal quar­ter of 2017.

Last year, AISB an­nounced its diver­si­fi­ca­tion into the prop­erty devel­op­ment sec­tor to ex­pand its rev­enue stream. The group started its maiden prop­erty devel­op­ment pro­ject called Avant In­dus­trial Park, in Shah Alam, upon ap­proval of the devel­op­ment order last April.

The pro­ject, which is lo­cated on its 11.5-acre land in Jalan Pe­laya, Shah Alam fea­tures 12 units of semi-detached fac­to­ries and two units of ware­houses, with a gross devel­op­ment value of RM160 mil­lion.

Speak­ing to re­porters af­ter the group’s EGM yes­ter­day, its ex­ec­u­tive di­rec­tor Datuk Ron­nie Lim Yew Boon said the group in­tends to rent out a por­tion of the devel­op­ment, which is ex­pected to gen­er­ate a gain of RM1.94 mil­lion per year.

“We have just re­cently con­cluded a ten­ancy agree­ment to build an of­fice/ware­house on a sec­tion of the land mea­sur­ing 4.46 acres, to pro­vide rental to a ten­ant for a ten­ure of nine years,” he added.

Ear­lier, Lim said 85% of the group’s share­hold­ers ap­proved its pro­posal to dis­pose its lease­hold fac­tory lands at Jalan Utas, Shah Alam, for RM69.5 mil­lion to Daikin Malaysia Sdn Bhd, to re­pay bank bor­row­ings and for fu­ture busi­ness devel­op­ment.

He said the as­set dis­posal, which will be com­pleted by the sec­ond quar­ter of 2017, is ex­pected to gen­er­ate a gain of RM17.2 mil­lion and pro­vide it with RM64.3 mil­lion in cash.

Lim said the cash fund would en­able the group to set­tle all its bor­row­ings, sup­port ex­ist­ing work­ing cap­i­tal re­quire­ment and in­vest in projects with bet­ter re­turns. “It will re­duce our bor­row­ings to zero level from 0.1% right now.”

Lim said the group’s op­er­a­tional of­fice will be re­lo­cated to UEP Subang Jaya, while it is on the look­out for a new lo­ca­tion for its fac­tory and ware­house within the Klang Valley area.

“We ex­pect the re­lo­ca­tion ex­er­cise to be com­pleted in June 2017,” he added.

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