Brem hopes to attract more institutional investors

by **Cals** Thu 02 Oct 2014, 02:24

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Brem hopes to attract more institutional investors

Business & Markets 2014

Written by Kamarul Anwar of theedgemalaysia.com

Wednesday, 01 October 2014 10:32

KUALA LUMPUR: Brem Holding Bhd is looking to attract more institutional investors, and one of the first steps towards that is its two-for-one share split which will enlarge the construction player-cum-property developer’s share base.

“After the split, we need to further enlarge our share base and operations. Our land bank is big enough to sustain our development. We have our construction segment too and a lot of cash,” said Brem managing director Datuk Khoo Chai Kaa.

In October, Brem’s 172.74 million share base will be doubled after shareholders approved the share split proposal at its annual general meeting yesterday.

As at June 2014, Brem’s cash pile was RM63.52 million, or 18.4 sen per share, while its long-term borrowings of RM98.34 million and short-term borrowings of RM10.97 million give it a net gearing level of 0.09 times.

Khoo said he is confident Brem’s 200ha land bank accumulated from many years ago, making its holding cost low and margins attractive, is more than enough to sustain the company for the long term.

“I don’t think the net tangible asset (of RM2.91 per share) is the real value of Brem. We hold our land at the acquisition costs and we bought all those plots of land years ago,” he said.

Most of Brem’s landholding is within the Segambut enclave, which is near the upmarket Mont’Kiara suburb. In July, Brem cashed out on its investment in associate Bertam Alliance Bhd by selling its entire 68 million or 32.89% shareholding to Wisma Jutamas Sdn Bhd for RM80.24 million cash. With the extra cash, it’s now on the prowl for more land.

Khoo does not discount investing in areas outside Kuala Lumpur or even overseas.

“We are looking at Melaka and even Penang. In the latter, we have a 25% stake in a joint venture to develop Emerald City,” he said.

Khoo also shared that Brem would be launching a project — Kiara Harmoni 1 — in the Segambut-Mont’Kiara area in December, which has a gross development value (GDV) of about RM450 million. Presently, Brem’s annual GDV is between RM300 million and RM500 million, and with its land bank getting larger, it would take on bigger developments in the future.

This article first appeared in The Edge Financial Daily, on October 1, 2014.