ENCORP, FELDA TO JOINTLY COMPLETE HOUSING AND COMMERCIAL UNITS DEVELOPMENT IN PADANG SIDING

KUALA LUMPUR, March 22 (Bernama) -- Encorp Bhd has inked a joint venture (JV) agreement with the Federal Land Development Authority (Felda) to jointly complete the development of housing and commercial units project on land belonging to Felda in Padang Siding, Perlis.

In a filing with Bursa Malaysia today, Encorp said it has nominated its wholly-owned subsidiary, Encorp Development Sdn Bhd (EDSB), as the holder of the development licence and any obligation on the part of the company under the agreement.

It said the project consisted of two phases with Phase 1 on a 10.12 hectares land comprised of the development of 158 units low-cost houses, 66 units of medium-cost houses and 17 units of shophouses.

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Encorp said Phase 2 of the project on an 8.5 hectares land would involve the construction of 102 units low-cost houses, 112 units of medium-cost houses, 56 units of semi-detached houses and 13 units of shophouses.

“Felda has partially developed Phase 1 of the project but development and construction has been deferred and Felda is now desirous to rehabilitate and complete the development of the project,” it said.

It said in consideration of Felda for providing the land to be developed, Felda and Encorp had agreed to share the profit from the project based on the ratio of 80 per cent for FELDA and 20 per cent for ENCORP for Phase 1 and 75 per cent for FELDA and 25 per cent for Encorp for Phase 2.

Encorp said the total estimated gross development profit for the Phase 1 and 2 is RM31 million and the profit would be distributed based on the ratio of the profit sharing.

Meanwhile, it said Encorp would be solely responsible to pay all of the development costs of the project with an estimated total cost of RM57.32 million which would be funded by utilising internally generated funds and/or financing facilities.

“The rationale of the JV is that it provides for a strategic partnership and is in line with the group’s business strategy to grow its construction segment.

“At the same time FELDA is able to complete and deliver the affordable housing scheme to promote the social and economic activities on the land,” it added.

-- BERNAMA