China Press, 15 November 2011 - Dijaya, Ivory to Resume Trading; Penang’s RM10 billion Development Plan
China Press, 15 November 2011
The announcement of a tie-up between Ivory Properties Group Bhd (Ivory 5175, main property stock) and Dijaya Corp (DIJACOR, 5401 main property stock) resulted in the suspension of trading last week and will be resumed today.
The two companies have announced a tie-up and have resumed trading today. The opening price for Ivory Properties was RM1.11 up 11 cents while Dijaya was up 6 cents and closed at RM1.45.
Both the companies have tied up to purchase a piece of land for RM1.1 billion, which is RM240 per sq ft at the golden site of Bayan Mutiara, Penang for joint development. The project will start next year.
The development project will cover 102.56 acres, of which 67.56 acres comprised of existing land and 35 acres are to be reclaimed.
Bayan Mutiara is a new development hub in the eastern part of the expressway, which is only 11 kilometres from the ferry terminal. It is also in the vicinity of the commercial centre of Sungai Nibong. It has great potential to grow.
To purchase the land, Ivory Properties proposed to finance the project via a renounceable rights issue of 186,000,000 new ordinary shares of 50 cents each as well as 186,000,000 new free detachable warrants on the basis of one (1) Bonus share for every (4) four rights shares subscribed as an encouragement.
Analysts predict that the development plan would contribute to their next financial year. However, the increase in shares volume base will dilute the company’s EPS by more than 50%. It will also reduce from 35 cents to 16 cents next year, and from 41 cents to 18 cents the following year.
Ivory Properties’ current NAV though is 50% less than expected, but with the new development plan, it hopes to strengthen and increase the future market value. At closing time, Ivory Properties closed at RM1.07 up 7 cents with 6,870,800 volume transacted, and Dijaya closed at RM1.44 up 5 cents with a total volume of 569,300 transacted.