AISB: Income from property biz to start flowing late 2017
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.