Encorp ties up with Aussie firm for A$75.41 mil project

KUALA LUMPUR (Nov 13): Encorp Bhd has entered into a joint venture (JV) with an Australian developer to jointly undertake a proposed mixed development in Australia that has an estimated gross development value of A$75.41 million (RM235.71 million).

In a filing with the stock exchange today, Encorp said its unit Encorp Development Pty Ltd (Encorp Development) has entered into a development and management agreement (DMA) with Tew Investments Pty Ltd to develop a piece of freehold land in Perth, Australia, without disclosing the size of the land.

Under the DMA, both parties will form an unincorporated JV company to develop the land, of which Encorp Development, being the landowner, shall not hold less than a 30% equity stake while Tew Investment's equity shall not be more than 70%.

According to the filing with Bursa Malaysia, both parties are desirous of developing the land into a multi-level mixed-use commercial and residential development project, comprising commercial units and approximately 165 residential apartments.

"On preliminary basis, the estimated gross development value of the project is A$75.41 million. As at the date of this announcement, the development plan of the project has yet to be finalised and still at the preliminary stage," the property developer added.

Encorp said the JV will provide Encorp Development an opportunity to unlock the value of the land.

"As the land is currently vacant and not in use, the JV allows Encorp Development to enjoy the prospects from the participation of the development of the project," it said.

It added that the sale proceeds arising from the disposal of the constructed unit are expected to contribute positively to the earnings of Encorp group.

On the funding, Tew Investment shall be solely responsible for securing all financing and loan facilities required and/or necessary for the implementation and successful completion of the project.

Shares in Encorp closed unchanged at 78 sen, for a market capitalisation of RM215.65 million. -- theedgemarkets.com