Tuesday, September 20, 2011

BRDB active, up in early trade

KUALA LUMPUR: BANDAR RAYA DEVELOPMENTS BHD [] (BRDB) shares were active in early trade on Tuesday, Sept 20 after the company agreed to disposed of four assets ' (i) CapSquare Retail Centre (ii) Permas Jusco Mall (iii) Bangsar Shopping Centre (BSC) and (iv) Menara BRDB ' to Ambang Sehati, for a combined value of RM914 million.

The consideration value includes RM484 million net liabilities related to BSC and Menara BRDB to be assumed by the purchaser.

At 9.05am, BRDB gained four sen to RM2.42 with 491,900 shares traded.

Following the proposed disposal, the group plans to distribute RM390 million from the assets sale to shareholders via a net cash dividend of 80 sen per share, comprising a two-tier gross dividend of 88 sen per share (net of tax 66 sen per share) and a single-tier dividend of 14 sen per share.

AmResearch in a note Sept 20 reaffirmed its Hold rating on BRDB with an unchanged fair value of RM2.45, pegging it to a 30% discount to our fully-diluted NAV estimate of RM3.50 per share.

'Apart from the dividends, the group plans to use RM302 million to settle its outstanding debt. Based our estimates, BRDB's gearing would be reduced to 0.4x from 0.7x as at end of December 2010.

'We would expect the group to be more aggressive in property launches now that jewel in the crown i.e. BSC would be disposed of. We estimated these four PROPERTIES [] would have contributed about 20%-25% to our EBIT projection for FY12F-FY13F with BSC making up the bulk of it,' it said.

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