Quick take: Sanbumi stock slides despite announcement of JV

KUALA LUMPUR: An upbeat announcement of a joint venture (JV) agreement failed to boost Sanbumi Holdings Bhd’s shares on Wednesday.

Sanbumi, of of the most active on Bursa Malaysia, shed 2.7%, or one sen to 36 sen with 7.55 million shares traded. In the past one year, the counter has appreciated some 114%.

Sanbumi’s unit Sanbumi Sawmill Sdn Bhd (SSSB) is going to jointly develop a proposed mixed development in Seberang Perai, Penang, worth an estimated RM127.81mil, with a private firm Iconic Development Sdn Bhd (IDSB).

SSSB inked a joint venture agreement today with IDSB for the proposed JV on the project, which comprises shop lots, offices and a budget hotel.

It said SSSB shall facilitate the implementation and completion of the development project, named ‘Iconic Point’, which is expected to commence in July 2019 and be completed by June 2021.

SSSB will pay IDSB an upfront participation fee of RM18mil which shall be satisfied via the proposed issuance of 57.32 million new redeemable convertible preference shares, at an issue price of 31.4 each.

In return, SSSB shall be entitled to 65% of the gross development profit of the development project, while IDSB shall be entitled to the balance 35%.

Source : TheStar