IGB-Aspire Horizon acquires land

IGB Corporation Bhd's wholly-owned subsidiary IGB International
Ventures Sdn Bhd and Aspire Horizon Ltd have inked a joint-venture (JV)
agreement for the establishment of a JV through an equity participation
of 58:42 basis in Wilmer Link Ltd (JVC).



In a filing to Bursa Malaysia, IGB Corp said the JVC will serve as
the equity pursuant to which the shareholders explore the setting up of
a special purpose corporate entity in Indonesia (SPV).



The SPV is to be solely owned by or jointly with the JVC for the
purpose of acquiring the title and or interest in a parcel of land in
Jakarta Barat, Indonesia for US$30.8 million and undertaking the
business of owning, developing, managing and/or operating the land
and/or such ancillary activities related to thereto or other
activities.



"The land property has potential for development by virtue of its
location and the JV is expected to contribute positively to the
earnings of IGB Group in future," it said.




The JVC, presently a wholly-owned subsidiary of Aspire,
will have an initial authorised capital of US$50,000 with issued and
paid-up share capital of US$1,000 comprising 1,000 ordinary shares of
US$1 each.



"IGB International Ventures would subscribe for 58 per cent of the
initial issued and paid-up share capital while Aspire would increase
its shareholding to and subcribe for the balance of 42 per cent," it
said.



Upon the execution of the agreement, the company said IGB
International Ventures will contribute an advance of not more than US$5
million to the JVC (IGB Advances) to be utilised by the SPV to partly
satisfy the estimated purchase amount for the land.



IGB Corp said IGB International Ventures would finance its 58 per
cent equity stake of US$580 in the JVC and US$5 million IGB Advances to
the JVC in cash.



"If the SPV business is successful, IGB intends to finance its
portion of the investment in the SPV through internally generated funds
and/or borrowings," it added.



Meanwhile, IGB Corp's wholly-owned subsidiary Rapid Alpha Sdn Bhd
(RASB) had acquired four contiguous pieces of vacant land in Ipoh from
Chin Pek Soo for RM3.295 million or RM31.86 per sq m.



"The land acquisition is in line with IGB Group's direction and
strategy to expand its Cititel hotel brand to further contribute to the
group's recurring income base," IGB Corp added.



RASB, upon the sales and purchase agreement, will be proceeding for
the development, construction and building of hotel at its own costs
and expenses.



It said the funding for the development of RM32.2 million,
including land costs, would be by way of a combination of internal
funds and/or bank borrowings. -- Bernama