Country Heights on lookout to acquire construction firm

SERI KEMBANGAN: Country Heights Holdings Bhd, which founder Tan Sri Lee Kim Yew (pix) has said will not be taken private, is looking to acquire a construction company, even if it is a listed one, to complement its property development business.
"To develop your business, I find that listed (status) is still very useful, so if there is an opportunity and Country Heights is capable, (we) should start (going) into other businesses, even using the listing status," he told reporters after the company's AGM last Friday.
The company is yet to identify any potential targets but intends to do so, Lee said.
Lee, who is also Country Heights deputy chairman, said the group is not in a position to undertake any acquisition by using cash, but via assets and landbank.
Asked by a shareholder whether Country Heights will be taken private, he said: "Why (should) I take (it) private?"
Despite being on the uptrend recently, Country Heights's share price of RM1.55 last Friday is still a 47.28% discount to its net asset per share of RM2.94, fuelling speculation that Lee may privatise it eventually.
For the first quarter ended March 31, 2014, Country Height posted a net profit of RM19.22 million, an increase of 1.53% from RM18.93 million in the previous corresponding period.
On the shareholders' request to pay dividends, Lee said financial-wise, the group is capable of paying dividends.
"With Country Heights' financials getting healthier, I think (the company) should consider paying dividend," he said.
But when asked how soon it will start to pay dividend, he said: "I cannot answer that, I think the board has to make decision, of course I'm the major shareholder, I supported the motion." Lee and his family collectively own more than 60% in Country Heights.
The firm has not declared any dividends since 1997, after it was hit by the Asian Financial Crisis which led it to accumulate a huge amount of debt.
Its shareholders have been demanding the group to pay dividends over the past few years as its financial position has gradually improved.
However, Lee said conserving cash is still the priority for the group for future developments, especially the Mines Wellness City.
Lee's daughter Diani Lee Cheng Ni, who is also the general manager for branding and communications, said the group still has substantial liabilities at the moment.
Country Heights' total borrowings stood at RM234 million as of December 2013, while its total assets were RM780 million before the revaluation of its sizeable landbank.
Commenting on the development of the RM11 billion Mines Wellness City spread over 10 years, she said it has been progressing well.
"The whole Mines Wellness City's tax incentive programme is for 10 years, of course we cannot say every project will be on time because we cannot see (five years into the future), but immediately for the next 12 to 24 months, all the projects that we've laid in place are going smoothly and timely," she added.
Besides that, a shopping mall known as "Mines Wellness Shopping" is slated to open at the end of this year.
Meanwhile, the group will launch four property development projects with a gross development value of RM938 million in the next 12 months.
Country Heights has about 6000 acres of land, of which a large portion is in Sarawak.