Tien Wah, Lum Chang to jointly develop mixed-use project

KUALA LUMPUR (May 17): Printing firm Tien Wah Press Holdings Bhd is teaming up with Singapore-listed Lum Chang Holdings Ltd to jointly develop a 13,040 sq m piece of land in Jalan Semangat, Petaling Jaya, Selangor into a mixed-use commercial development.

In a filing with Bursa Malaysia yesterday, Tien Wah said the piece of land is currently held by its wholly-owned subsidiary Tien Wah Properties Sdn Bhd (TWPSB) on a 99-year lease from the Selangor state government, with about 44 years remaining on the lease.

TWPSB yesterday signed a shareholders’ agreement with Kemensah Holdings Pte Ltd (KHPL), a wholly-owned unit of Lum Chang, to form and operate a joint venture (JV) company called Sterling Model Sdn Bhd for the proposed development.

The JV company will be a 50:50 venture between TWPSB and KHPL. It is applying to the Companies Commission of Malaysia to change the company’s name to Lum Chang Tien Wah Sdn Bhd.

On the same date, TWPSB also signed a sale and purchase agreement with Sterling Model to sell the land to the latter for RM63.75 million.

Tien Wah said the land was acquired by TWPSB in 2005 and its total net book value was RM26.5 million based on the latest audited financial statements of TWPSB as at Dec 31, 2015.

“The expected gain in the consolidated financial statements of Tien Wah is approximately RM29.5 million,” it said, adding that proceeds from the proposed land sale are intended to be used for the proposed development.

Tien Wah expects the proposed land sale to be completed by the third quarter of this year.

Meanwhile, Tien Wah said it will seek the approval of its shareholders for diversification of its operations into property development activities once the contribution from this segment reaches 25% or more of the group’s net profit or net assets.

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This article first appeared in The Edge Malaysia on May 17, 2016. Subscribe here for your personal copy.