Thursday November 22, 2012

Bolton ready to expand, raises RM370mil from sukuk and bank credit facility


Azman (right) exchanging documents with Affin Investment Bank MD Maimoonah Hussain. Looking on is Danajamin CEO Ahmad Zulqanain Onn. Azman (right) exchanging documents with Affin Investment Bank MD Maimoonah Hussain. Looking on is Danajamin CEO Ahmad Zulqanain Onn.

PETALING JAYA: Bolton Bhd has inked two agreements to raise fresh funds amounting to RM370mil to expand its business where the property outfit is now well poised to expand its landbank in areas where property, especially residential is in high demand.

The funds were made up of RM230mil Islamic medium-terms notes programme guaranteed by Danajamin Nasional Bhd and a RM140mil revolving credit facility by Affin Bank Bhd.

The proceeds of Bolton's inaugural sukuk issuance will be largely utilised to finance land acquisitions while the five-year revolving credit facility would be used mainly for project financing.

Affin Investment Bank Bhd is the principal adviser and lead arranger while Danajamin is the financial guarantee insurer.

Bolton, primarily a Klang Valley developer with some legacy projects in Kedah, is now looking at Kota Kinabalu, Penang and Kota Baru to expand its landbank.

For a start, Bolton has signed a 50:50 joint-venture (JV) agreement with Mobuild Sdn Bhd, the owner of 10 acres on Signal Hill in Kota Kinabalu.

Bolton executive chairman Tan Sri Azman Yahya said the new fund-raising exercise would enable it to embark on a landbank acquisition exercise to sustain the group's growth for the next 10 years and beyond.

“Of the RM370mil raised, about RM250mil will be allocated in the payment of land premiums and acquisition of strategic landbank while the rest will be for project financing needs,” he said after the signing ceremonies of the sukuk and JV agreement.

Azman said the Kota Kinabalu project would be the company's maiden entry into east Malaysia.

“This project will entail the development of 500 units of luxury condominiums and 50 units of landed villas on 10.33 acres located in the prestigious Signal Hill.

“The estimated gross development value (GDV) of this project is RM480mil and we target to launch in the first half of next year,” he said.

For the development in Kota Baru, Azman said it was looking to annnounce the development somewhere by late this year or early next year.

“Currently, the demand in Kota Baru is good where quality housing supply is lacking. For Penang, it would take quite some time as land is quite scarce there.

“We are planning to develop high-rise condominiums in these two cities,” he said.

Azman said for the time being Bolton had several projects already in the pipeline with a total GDV of RM3.5bil.

“Bolton is now focused on drawing up the masterplan to develop our 625 acres in Sungai Long into our new flagship integrated township development that would generate revenue and profit for the next 10 years.

“We expect to launch the first phase of this yet-to-be named township comprising 160 acres within the next two years with target GDV in excess of RM1bil.

“The remaining phases will be developed over the next ten years and could further generate GDV of more than RM2bil,” he said.

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