Borneo Post Online
4th August, 2015

KUCHING: Several development projects in Melaka could be in the offing including the Federal approval for an additional RM180 million for the Melaka river beautification and rehabilitation project.

AmResearch Sdn Bhd (AmResearch) said other potential catalysts include proposal to expand the Melaka International Airport; and RM1.1 billion coastal highway in the state.

This comes amidst the recent endorsement by the cabinet of Melaka’s ‘twin state’ status with Guangdong City, the capital of Guangdong province in China.

Earlier reports indicated that both cities are looking to forge closer collaborations in the fields of economy and tourism.

If followed through, this latest development certainly bodes well for Benalec Bhd’s (Benalec) land concessions in Melaka, which has seen more tourism-related investments in recent years.

“We estimate the group to have circa 240 acres of land inventories in Melaka and RM523 million in future land sales with SPAs (287 acres) that are awaiting the issuance of land titles.

“The most recent sale is in Klebang (70 acres) for RM129 million, which could translate into a net gain of RM34 million by the first quarter of 2016.

“Once realised, these transactions could help provide some degree of earnings visibility to the group over the next two years,” said AmResearch.

“More importantly, we expect Benalec to commence initial reclamation works at its Tg. Piai concession this month.”

At the same time, the group is set to step-up discussions with potential offtakers which previously expressed interest to buy portions of roughly 1,000 acres that was originally earmarked for 1MY Strategic Oil before the deal lapsed in June.

The sealing of a maiden offtaker will go a long way towards narrowing the deep discount of 71 per cent that Benalec is trading at vis-à-vis its NAV.

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