Sunsuria founder to 'nurture' Malaysia Aica into property company

by **Cals** Mon 27 Jan 2014, 02:10

Published: Saturday January 25, 2014 MYT 12:00:00 AM
Updated: Saturday January 25, 2014 MYT 8:41:46 PM
Sunsuria founder to 'nurture' Malaysia Aica into property company
BY TEE LIN SAY
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Ter owns 17.37% in Maica and plans to increase his stake to 50.11%.
The deal involving Sunsuria Development Sdn Bhd serving a notice of a mandatory general offer to Tan Sri Robert Tan Hua Choon’s Malaysia Aica Bhd (Maica) is now underway.
Sunsuria’s group founder and executive chairman Datuk Ter Leong Yap owns 17.37% in Maica and is proposing to take his stake in the company to 50.11% once buying out Tan and three others from the company.
The reason for doing so is to turn the maker of wooden and fire-rated doors into a property developer, and that move has been given the nod from minority shareholders on Jan 20 during an EGM.
“Let me be clear that we are not doing a reverse takeover of Maica. We are taking a nurturing route where we nurture Maica to become a property company. Maica has a very established business in wood manufacturing. This is synergistic with what we do and we will continue to maintain that business,” Ter tells StarBizWeek.
Moving in a different direction
Sunsuria isn’t exactly small. It has 3 pieces of land which it considers strategic: 28 acres of land in Setia Alam, Shah Alam, some 82 acres of land in Medini, Johor and the 300 acres of development land enveloping Xiamen University branch campus in Salak Tinggi. Sunsuria is presently also the facilitator for the university. Together, these three plots of land have an estimated gross development value of RM10bil once it’s developed.
Ter adds that any land acquisition moving forward, would be injected into Maica, rather than Sunsuria.
“The priority will be given to the listed entity. Of course, with the approval of minority shareholders, I do hope we get to inject some of Sunsuria’s developments in Maica. We can also buy land, and this is something which we are constantly on the lookout,” says Ter.
Ter says that the plan is to achieve sales of RM1bil in two years and eventually become a large developer. These plans were already evident last year, when it started cherry picking top brass in its management team. This included Ho Hon Sangand Koong Wai Seng, who took up positions of chief executive officer and deputy CEO respectively.
Ho was previously managing director of Sunway Bhd’s property development division while Koong was executive director of Tropicana Corp Bhd.
Nonetheless, to achieve its ambitious sales target of RM1bil, it would appear that Ter would need to either inject Sunsuria’s existing landbank in Maica, or to scout for new pieces of land.
Changing the face of Maica
Up to March 31, 2013, some 81% of Maica’s revenue came from the manufacture of wood products, while approximately 17% comes from the granting of hire-purchase and other financing.
Operating profits wise, the bulk of it came from hire purchasing and finance. For the period, the company made an operating profit of RM1.72mil.
This will immediately jump to approximately RM6mil for its year ended March 31, 2014, following the injection of two pieces of land worth some RM56mil in Bukit Jelutong done.
The agreements were for the acquisition are for the rights and interest of a commercial development project known as ‘Trivo, Suria Jelutong’ which comprises 30 units of double-storey shop offices together with infrastructures to be constructed for RM25mil.
The second plot of land, or Land 2, bought in that deal is the adjacent property measuring 14,370 square metres for a total RM31mil.
That deal saw Cangkat Nusantara Sdn Bhd (CNSB), which is a unit of Sunsuria, emerge with an 18% stake in Maica.
The major shareholders of CNSB are Sunsuria Venture Sdn Bhd and Tingyap Holdings Sdn Bhd. Both companies are owned by Ter, who owns 91% of Sunsuria.
“For Land 2, we are close to securing all approval. We plan to launch service apartments there with a GDV of some RM260mil by the end of this year,” said Ter.
Ter adds that Medini was also looking very interesting as it is the only area in the state of Johor to get an exemption from the property gains tax announced in October.
“We have submitted our masterplan, and are hopeful to start launching in March or April. We will start with commercial and industrial lots,” says Ter.