Oilcorp, AmanahRaya to develop office tower, hotel suites
Posted on | August 10, 2007
By THE EDGE
KUALA LUMPUR: Oilcorp Bhd is teaming up with Amanah Raya Bhd to jointly develop a 35-storey office tower and a 33-storey hotel suites here at a gross development cost of RM330 million.
In a statement yesterday, Oilcorp said their subsidiaries Magic Coast Sdn Bhd (MCSB) and AmanahRaya Development Sdn Bhd (ADSB) had inked a joint development agreement and the underwriting agreement for the project known as D’Tiara Office and Hotel Suites.
The development on a 8,871 sq m parcel of land is expected to start from September 2007, and targeted for completion by end-2010. The land is valued at RM44.36 million.
ADSB is underwriting the 35-storey office building, which will have 400 car park bays, at a price of RM149.31 million, half of the total development cost.
A total of RM30 million, or 20%, of the total underwriting price would be paid to MCSB as part of the consideration of the underwriting arrangement.
Oilcorp said that as such, the business risk had been significantly reduced in terms of securing future sales of the office units.
It said ADBS would be entitled to 50% of the project’s pre-tax profit, or a minimum guaranteed profit of RM30 million. MCSB has guaranteed a pre-tax profit of at least RM60 million for the project.
Additionally, ADSB will procure up to RM80 million based on a revolving and reducing balance basis to finance the proposed development, Oilcorp said.
Oilcorp expected the project to contribute positively to its earnings and net asset for the next four years from the financial year ending Dec 31, 2007.
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