The Edge Financial Daily, 12 May 2014 - Tropicana ongoing asset monetisation a positive move

The Edge Financial Daily, 12 May 2014

Tropicana ongoing asset monetisation a positive move Tropicana Corp Bhd (May 9, RM 1.59) Maintain buy at target price of RM1.80: On May 8, Tropicana announced that it has entered into a subscription and shareholders agreement with Agile Real Estate Development (M) Sdn Bhd, a wholly-owned subsidiary of Hong Kong listed Agile Property Holdings Limited, to jointly acquire and develop 3.138 acres (1.269ha) of land near Bukit Bin-tang in Kuala Lumpur.

The joint venture company (70% owned by Agile and 30% by Tropicana) has entered into a conditional sale and purchase agreement with Tropicana Bukit Bintang Development Sdn Bhd, a wholly-owned subsidiary of Tropicana, to purchase eight parcels of freehold land measuring 3.138 acres for a total cash consideration of RM448.4 million or RM3,281 per sq ft (psf). Tropicana acquired the land from its major shareholder Tan Sri Danny Tan in 2012 for RM168 million (RM 1,228 psf) under an amalgamation exercise.

The freehold land is strategically located along Jalan Bukit Bintang/Jalan Delima and Jalan Jati.

There is currendy a three-storey commercial building, two double storey detached units, carparks and a badminton court on the land.

The land has been earmarked for a mixed commercial development project.