Benalec poised to enter new growth level

SHAH ALAM: Benalec Holdings Bhd could be on the threshold of a new level of growth following the approval of a heads of agreement (HOA) to restore a land sale by its shareholders, said its managing director Datuk Leaw Seng Hai.
To recap, Benalec in October last year terminated the services of two directors – Datuk Leaw Tua Choon and Datuk Leaw Ah Chye – who are the elder brothers of Seng Hai. Both of them were allegedly found guilty of misconduct in land sale deals, including unrecorded profits arising from the sale of certain pieces of land to Sunshine 2000 Sdn Bhd and Seaside Synergy Sdn Bhd.
The HOA was formulated to cancel all agreements whereby the titles to the land will be restored to Benalec and the purchase moneys refunded.
"With the shareholders' approval, today marks the end of the challenging episode. Along the way, our commitment to good corporate governance has been considered strengthened and we are taking the group to the next level. Moving forward, we're all very excited by the future prospects of the group," he told shareholders in the EGM here yesterday.
Its COO Bernard Boey expects Benalec's financial performance to be better in 2015, as more earnings will be recognised progressively.
For the nine-month period ended March 31, 2014, Benalec's net profit dropped 56.68% to RM22.83 million from RM52.71 million a year ago, due mainly to the completion of certain projects in Malacca and less progress of work.
Currently, Benalec holds unbilled sales of RM900 million.
On the Tanjung Piai concession right in Johor, Seng Hai said the company's strategy would be "build and sell", aiming for premium prices as the transaction price is lower without starting the reclamation works.
"We better start the reclamation works, then we can sell with premium," he said, stressing that there is no political issue that could hinder the progress of the project.
Benalec in March last year signed a binding term sheet with the State Secretary of Johor and 1MY Strategic Oil Terminal Sdn Bhd to undertake reclamation works and sale of 1,000 acres off the coast of Tanjung Piai, Johor. The 1,000 acres form part of Benalec's entitlements to reclaim 3,485 acres off the coast of Tanjung Piai and 1,760 acres along the shoreline of Pengerang, Johor.
It has been reported that the total project value will be in the range of RM15 billion to RM20 billion.
However, the binding term sheet has been extended three times thus far, with the sale and purchase agreement still yet to be signed.
However, Boey is hopeful the reclamation works could start as early as the end of this year.
"Of course we have plan B and plan C, we are not fully depending on the Johor project, we still have other projects like in Malacca," he said.
Benalec also expressed its interest in the second phase of Eastern & Oriental Bhd's Sri Tanjung Pinang project which covers about 700 acres of land. "We're keen, we work hard for that project. We try our best," Seng Hai said.