Harimau Capital

Dijaya had, on 6 March 2012, entered into a conditional amalgamation exercise agreement (“AEA”) with Tan Sri Dato’ Tan Chee Sing and certain parties related to him  pursuant to which Dijaya and the Vendors propose to participate in and implement an asset amalgamation and rationalisation exercise involving the amalgamation of the assets and properties of Dijaya and its subsidiaries (“Dijaya Group” or “Group”) with certain identified assets and properties of the Vendors (“Proposed Amalgamation Exercise”).

Upon completion of the Proposed Amalgamation Exercise, the size of the land bank will increase to 870 acres and the Gross Development Value (“GDV”) will increase to RM37 billion. In addition, the investment properties’ lettable areas will increase to 1.4 million square feet. The additional investment properties to be acquired from the private property companies are estimated to generate a more stable and recurring income for Dijaya.

Under the Proposed Amalgamation Exercise, Dijaya will acquire 73 properties held privately by YBhg Tan Sri Dato’ Danny Tan for a total consideration of approximately RM948.7 million, to be satisfied by RM250 million cash and the balance via the issuance of a 10-Year 2% coupon Dijaya Redeemable Convertible Unsecured Loan Stock (“RCULS”), with a staggered conversion price range of RM1.30 to RM2.50 over a 10-year period. 

The purchase consideration takes into account the adjusted net assets of the various companies and the indicative aggregate market value of the property assets of approximately RM1.1 billion as appraised by the independent professional valuers, namely CH William, Knight Frank, CBRE and Rahim & Co.

As an integral part of the proposed amalgamation exercise, Dijaya will undertake an equity fund raising exercise via a renounceable rights issue of up to 491,302,655 new ordinary shares of RM1.00 each in Dijaya (“Dijaya Shares”) (“Rights Shares”) at an issue price of RM1.20 per Rights Share, together with a bonus issue of up to 122,825,664 new ordinary shares of RM1.00 each in Dijaya (“Bonus Shares”) to be credited as fully paid-up, on the basis of four (4) Rights Shares for every five (5) existing Dijaya Shares held and one (1) Bonus Share for every four (4) Rights Shares subscribed. YBhg Tan Sri Danny Tan and the parties related to him will provide Dijaya with undertakings to subscribe for RM250 million in value pursuant to the Proposed Rights Issue, which will constitute the minimum subscription level for the Proposed Rights Issue.

To further meet the business investments and long-term capital requirements of the Group, Dijaya also proposed a debt funding via the issuance of up to RM500 million guaranteed commercial paper / medium term notes programme (“CP/MTN”) with an option to issue detachable warrants. RHB Bank Berhad and AmBank (M) Berhad are the guarantor banks and RHB Investment Bank Berhad and AmInvestment Bank Berhad are the appointed Joint Lead Arrangers/Joint Lead Managers for the Proposed CP/MTN Programme. Astramina Advisory Sdn Bhd (“Astramina Advisory”) is the appointed Financial Advisor for the proposed CP/MTN programme.

PETALING JAYA: Dijaya Corp Bhd wants to build up its market presence in Johor and Penang, and expects to see a bigger contribution from the two growth markets. Although the central region of Selangor is still the biggest contributor accounting for more than 70% of the company's sales and bottomline, Dijaya managing director Datuk Tong Kien Onn is looking at bigger contribution from the northern and southern regions.

“We want to build a stronger presence in these two markets to take advantage of the strong growth in Penang and Johor,” Tong told StarBiz. Over the next two to three years when the projects started to move, he said contribution from Selangor was expected to drop to about 40%.

Dijaya plans to launch RM1.1bil worth of projects this year compared with about RM700mil last year. For 2012, it is targeting sales of between RM650mil and RM700mil. Last year, it sold about RM420mil worth of properties. In Johor, Dijaya has two joint ventures with Iskandar Waterfront Sdn Bhd for projects in Danga Bay. The first project, Tropicana Danga Bay on 37 acres is a 60:40 joint venture between Dijaya and its partner. The project under the joint venture company, Global Corporation Sdn Bhd is located only about five minutes to the Johor-Singapore Causeway. The land was purchased at a cost of RM318mil about 1 years ago.

Tropicana Danga Bay with expected gross development value (GDV) of RM3.8bil will comprise 60% commercial and 40% residential components. It will take eight to 10 years to complete. The first phase comprising a block of 420 service residences was launched last December at average prices of RM620 per sq ft. Tong said about 90% of the non-bumi lots have been sold to-date. Dijaya also has a 50:50 joint venture with Iskandar Waterfront Sdn Bhd to undertake the 225 acre Tropicana Danga Cove. The land was bought for RM220mil in the last quarter of 2011.
The RM2.8bil development is expected to take 10 to 12 years. Construction of the project may kick off in March with the first phase comprising 3-storey shop offices. In Penang, Dijaya has set up a 55:45 joint venture with Ivory Properties Group Bhdto buy and develop a 41.02ha site in Bayan Mutiara. The joint venture company,Tropicana Ivory Sdn Bhd paid RM1.07bil for the land and the repayment period will be over five years.

Tropicana Ivory will undertake a mixed residential and commercial property project with GDV of RM9.8bil over the next eight to 12 years. Last Thursday, Dijaya received the nod from its shareholders to enter into the joint venture with Ivory Properties. Tong said the master plan for the Penang project would be finalised in the next two to three months and the mixed integrated development is set to showcase some iconic structures.

Meanwhile, in Selangor, projects in the pipeline this year will comprise two new projects in Tropicana Indah Resort Homes namely Golf Villas and Tropicana Garden. In Subang, Dijaya plans to build three-storey link, semi-detached and bungalow houses, condominiums as well as commercial development on its 35.4ha landbank.

Also in the pipeline will be bungalows, link houses and semi-detached units at Tropicana Cheras and Tropicana Balakong.