PETALING JAYA: Grand-Flo Bhd’s wholly owned subsidiary, Innoceria Sdn Bhd, has entered into a joint venture agreement with Pembinaan Maka Cemerlang Sdn Bhd (PMC) to develop 13.23 acres of leasehold land in Kampar, Perak.
The project will be a mixed development comprising 352 units of single-storey terrace houses and 24 units of double-storey shop houses, with an estimated gross development value of RM88.2 million.
The group currently has two ongoing development projects in Batu Kawan and Bukit Mertajam which are almost completed.
“The proposed joint venture represents a strategic opportunity for the group to replenish its existing property development projects.
“The Kampar project is expected to improve the revenue and profit contribution from the property development segment as well the overall financial performance of the group moving forward,” it said in a filing with Bursa Malaysia.
The proposed joint venture is expected to generate an estimated gross development profit of RM14.13 million.
The project will be financed via a mix of internally generated funds, borrowings and part of the proceeds raised from a proposed private placement.
In the same filing, Grand-Flo said it would undertake a private placement of up to 47.04 million new shares to independent third-party investors, which is expected to raise gross proceeds of RM11.76 million for its property development activities.
Grand-Flo said a private placement had been deemed to be the best option for fund raising as it would not have to incur interest expense or service principal repayments.
The proposals are expected to be completed by the fourth quarter this year.