AMDB to continue selling non-core assets

KUALA LUMPUR: AMDB Bhd will continue to dispose of its non-core assets in its bid to streamline its operations, but only if the price is right, said its chief executive officer Ben Lee.

"We still have a few businesses that we are looking at hiving off, but only if the opportunity arises," he told reporters after AMDB's EGM here yesterday.

He said AMDB had divested RM432 million worth of non-core assets over the past three years in order to make the company "lightweight".

Asked when the company would see profit growth from its core business of property and infrastructure, Lee said it was still too sensitive an issue. "We can't comment on the profits at this time," he said.

Lee said among the most important concerns for AMDB was to continue cleaning up its balance sheet. The company already boasts a net gearing of 0.08 times, which he pointed out was among the lowest of all the property players.

"We are also looking at improving our net tangible asset (NTA) per share. Since we started cleaning up the company, it has moved up from 29 sen to 80 sen. After the scheme is completed, our NTA will be 85 sen per share," said Lee.

The EGM yesterday was to seek shareholders' approval for AMDB's restructuring exercise, which includes a capital reduction and the acquisition of four property development firms from its controlling shareholder AmcorpGroup Bhd.

The capital reduction is to erase its accumulated losses of RM356.5 million. The acquisition of the four companies — the entire equity of Amcorp Prima Realty Sdn Bhd, Regal Genius Sdn Bhd and Distrepak Sdn Bhd and a 60% stake in HDC-Amcorp JV Sdn Bhd — will strengthen the company's position as full-fledged property player.

AMDB will pay for the four companies by settling their intercompany loans with Amcorp, through a mixture of cash and the issuance of new shares.

After the exercise is completed, Amcorp will be left holding a 74% stake in AMDB, of which which it intends to offer 121 million shares to the latter's minority shareholders at 50 sen per share.

However, given that AMDB's share price has been hovering around 18 sen, it is unlikely that the shareholders will take up the offer.

"We are not concerned about that issue, as Amcorp has said that they will hold on to the shares. While I can't speak for the Amcorp group, the gesture is an indication of its long-term commitment," said Lee.

Among the assets that will be taken over by AMDB are two major development projects, one in Shah Alam and the other in Sibu, Sarawak.

However, Lee admitted that the softening Malaysian property market had made AMDB's road to recovery that much harder. As a result, a number of property companies are now offering various incentives along with attractive financing packages.

"We do have to be more creative when it comes to selling our properties, and it has become clear to us that more leg work is needed. Our roadmap has just started," he said.