DBE diversifies into property development

PETALING JAYA: Poultry firm DBE Gurney Resources Bhd proposes to diversify into property development segment.

DBE said its wholly owned subsidiary DBE Development Sdn Bhd had entered into a joint development agreement dated Feb 5 with Misi Jutari Sdn Bhd for the construction and development of a mixed development project in Bota Kanan, Seri Iskandar, Perak with a gross development value of RM24.5 million.

It is to be developed over a two-year period and DBE will be entitled to 75% of the development profit.

Barring any unforeseen circumstances, the proposed joint development is reasonably expected to contribute more than 25% of DBE’s net profit and may result in a diversion of more than 25% of its net assets.

DBE said although the group does not have any historical track record in the property development and construction, the new business segment is expected to be spearheaded by its executive director Datuk Doh Jee Ming, who has extensive experience in the property development and construction related business.

Following the new business venture, the group also proposes a variation to the balance unutilised proceeds of RM12.56 million from the redeemable convertible notes issuance, whereby it will be reallocated to fund the project development financing under the proposed joint development and to finance future landbank acquisitions.

In view of the future prospects of the existing poultry business will continue to be challenging, DBE said the proposed diversification is consistent with the group’s intention to diversify its revenue and income stream so as to mitigate the risk of overdependence on its existing business.

DBE’s share price was unchanged at 3.5 sen yesterday, with some 20.41 million shares changing hands.