Yong Tai secures more financing for Impression City
> Kirin Financial Group Ltd to arrange RM400m, while Bank of China to provide RM100m financing
PETALING JAYA: Yong Tai Bhd has secured additional funding for its RM7 billion gross development value cultural tourism property development project Impression City in Malacca, which was bogged down by “unforeseen circumstances” such as financing and land acquisition.
In a strategic alliance signing ceremony yesterday, the group entered into an agreement with Kirin Financial Group Ltd, a unit of Hong-Kong listed Kirin Group Holdings Ltd, for a proposed investment of not less than RM400 million.
Additionally, Yong Tai has secured a RM100 million facility from the Bank of China to partly finance the Encore Melaka theatre, which is also Malaysia’s first standard indoor theatre nestled on a 15acre site at Impression City. The entire project will be developed in stages on a 138-acre parcel of land.
Yong Tai’s chief executive officer Datuk Wira Boo Kuang Loon said funding from the Bank of China was supposed to come through in 2013 but did not materialise due to a fallout between Malaysia and China over the disappearance of Flight MH370.
The loan, which exceeded RM100 million, had to be “tabled back” in China for approval as the date of the tabling was scheduled for March 9, 2013, which coincided with the disappearance of the Beijing bound Malaysian Airlines flight.
About RM90 million of the facility will be used to finance the Encore Melaka theatre while RM10 million will be deployed for operation expenditure, including salaries of performers.
The theatre will be the first to feature the Impression Series theatre performance art outside China.
The RM400 million to be arranged by Kirin will be utilised for the development of facilities and services for the audience.
This is the latest round of funding to come through in addition to the RM500 million secured previously, of which Hong Kong listed Sino Haijing Holdings Ltd contributed RM280 million.
Construction for the development began last year and is expected to go on for eight to 10 years.
Boo said the project, which was launched in 2016, saw obstacles in the form of securing land and funding from local financial institutions.
He said the headwinds were largely due to the lack of familiarity with the Impression Series, which is popular in China.
However, with the support of the Tourism Ministry, the group received a letter of support for the project for a potential infrastructure soft loan.
Yong Tai is also looking to repay the RM100 million facility through funds raised through ticket sales.
For this purpose it has signed ticket sales agreements with six travel agents for the sale of one million tickets a year for a period of three years.
Ticket sales for the series, which is to be launched in the second quarter this year, is expected to bring in about RM120RM140 million, with ticket prices ranging between RM120-RM130 per pax.
Boo is also expecting the Encore Melaka theatre to contribute significantly to the group’s revenue for the financial year ending June 30, 2019.
On top of that, Yong Tai is expecting a yearly net profit of RM60 million when it is fully operational.
The project is expected to attract approximately 1.2 million tourists a year, generating about RM179 million in gross national income.
Meanwhile, Yong Tai told Bursa Malaysia that it proposes a variation to the utilisation of the proceeds raised from its private placement following the land deal termination between Iconic Paragon Sdn Bhd and Dewan Bandaraya Kuala Lumpur.
For now, RM27.68 million has been earmarked to partly finance Yong Tai’s existing and future projects within Impression City, while RM15 million is for the future acquisitions of new landbank and/or property development.