AHB unit inks JVA to undertake residential development with RM29.86 mil GDV

TheEdge Fri, Jun 03, 2022 11:25pm - 1 year View Original


KUALA LUMPUR (June 3): AHB Holdings Bhd's wholly-owned subsidiary, AHB Development Sdn Bhd (AHBD) has entered into a conditional joint venture agreement (JVA) with Awan Jingga Sdn Bhd (AJSB) to undertake a residential development in Mukim Petaling here with an estimated gross development value (GDV) of RM29.86 million.

In a filing with Bursa Malaysia, AHB said the project involved the development of one unit of three-storey bungalow and eight units of three-storey link villas under Project Taman Yari and will be built on four parcels of land measuring about 0.38 hectare.

Pursuant to the JVA, a joint-venture will be established between AJSB and AHBD to carry out the project whereby AJSB, being the beneficial owner of the land, will provide the land, and AHBD will provide the funding.

The estimated gross development cost of the project is RM14.38 million.

"The development project, which had commenced on May 15, 2022, is expected to be constructed over a period of three years,” it said.

Meanwhile, AHB, which is principally engaged in the trading of office furniture, specialised computer furniture and office interior products, has taken steps to explore and identify new business opportunities to provide alternative sources of revenue to the group.

"The execution of the JVA with AJSB for the development project provides AHB Group an opportunity to venture into property development which will consequently reduce its reliance on its single business segment and to create an additional source of income.

"The board anticipates that the development project and/or future property development project (if any) will potentially contribute 25% or more of the group’s net profit and/or result in a diversion of 25% or more of the group’s net assets," said AHB.

The company has also proposed the issuance of redeemable convertible preference shares (RCPS) of up to 600 million units at an issue price of RM0.10 per RCPS, totalling an aggregate principal amount of up to RM60 million.

The total number of new ordinary shares in AHB to be issued upon conversion of the RCPS is subject to a maximum number of 187.05 million conversion shares, representing about 49.77% of the total number of issued AHB shares as at the latest practicable date.

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