E&O, Mitsui seal third deal to develop serviced apartments in KL

PETALING JAYA: Eastern & Oriental Bhd (E&O) has signed an agreement with Japan's Mitsui Fudosan Co Ltd to jointly-develop to jointly develop a 298-unit serviced apartment project on a piece of freehold land in Kuala Lumpur.
E&O's indirect wholly-owned subsidiary Samudra Pelangi Sdn Bhd and Mitsui's indirect wholly-owned subsidiary Mitsui Fudosan Asia Pte Ltd (MFA) entered into a shareholders' agreement to develop the 5,812 sq m land through Patsawan Properties Sdn Bhd (Patsawan).
This marks E&O and Mitsui's third alliance, their second in terms of residential development.
E&O said the shareholders' agreement was executed simultaneously with the execution of a sale and purchase agreement, dated March 20, 2015, between Samudra and MFA for the disposal by Samudra to MFA of a 49% stake in Patsawan, or 68,600 ordinary shares of RM1 each, for RM82.37 million.
Of that, RM53.92 million was consideration for the sale of the equity stake while RM28.46 million was for a loan to be advanced by MFA to Patsawan to repay an existing loan that was granted by Samudra to Patsawan.
E&O expects to realise an estimated one-off gain of approximately RM48.8 million from the proposed stake disposal.
"The proposed disposal is expected to contribute additional earning of approximately RM0.04 per share to the E&O Group for the financial year ending 31 March 2015. In addition, the proposed development on the land is also expected to contribute positively to the future earnings of the E&O Group," it said.
The proposed disposal is expected to complete on Mar 27, 2015, while the proposed development of the land is to start in the third quarter of 2015.