MK Land sticks to strategy to cut debt

MK Land has so far locked in RM138 million in joint-venture projects, which will help it settle its loans in stages.

PROPERTY developer MK Land Holdings Bhd will continue with its strategy to form joint ventures for land development and selling land that it does not plan to develop to reduce its debt.

The group has settled borrowings by RM98 million to RM398 million through asset realisation exercises and more stringent cash flow management. In 2008, it was riddled with some RM550 million in debts.

Chief operating officer Lau Shu Chuan said MK Land has so far locked in RM138 million in joint-venture projects, which will help it settle its loans in stages.

Over the last two years, the group has made RM162 million in land sale after disposing of 9.3ha land in Damansara Perdana for RM150 million and 2ha land in Cyberjaya for RM12 million.
For the financial year ended June 30 2010, MK Land posted a RM11 million net profit on the back of RM308 million in revenue.

"We have put in place various strategies to improve operations and standards of services to strengthen relationship with bankers, contractors, consultants and purchasers," Lau said after the group's annual general meeting in Kuala Lumpur yesterday.

MK Land has some 2,025ha of landbank, of which 1,620ha is located in Lembah Beriah, Meru Perdana and Bukit Merah in Perak.

Lau said the group is waiting for the completion of the Alor Pongsu interchange in Perak before launching property development projects there.

"The construction is said to start next year and will be ready in two years. Hopefully we can start developing the land by then."

The Alor Pongsu interchange will ease the entries and exits to the North-South Expressway and is expected to boost the development in Bandar Lembah Beriah.

Meanwhile, in the Klang Valley, MK Land will continue with its ongoing mixed development projects in Damansara Perdana - three-storey semi-detached house projects namely Rafflesia, Armanee Terrace and Metropolitan Square.

It is also undertaking a RM3 billion project to develop affordable housing in northern Bangalore, India.

MK Land is partnering two other companies in the project - Embassy Group of India and MKN Embassy Development Sdn Bhd.

The project will be undertaken in four phases and developed within five years. It will potentially build 16,000 affordable houses, ranging from 650 to 1,200 sq ft, and about 560 retail outlets.

By Business Times