![]() Revenue, however, fell 18% year on year to RM1.04 billion on lower sales and progress billings across projects. More recently, Tropicana’s net profit for the cumulative nine months ended S(9MFY2018), grew 13.5% year on year to RM118.55 million, thanks to cost-saving efforts in its projects. However, the company’s earnings fell between FY2013 and FY2015, which is hardly surprising as most developers were hit by the prolonged slowdown in the local property market at the time. Revenue in FY2013 rose 134% year on year to RM1.48 billion. The big boost came from a net gain in fair value adjustment to RM217.6 million from RM103.4 million in FY2012. In its financial year ended (FY2013), Tropicana posted a net profit of RM362.31 million, up 111% from the preceding year. Tan stresses that Tropicana will not need to borrow for the latest asset injection because the bulk of the purchase consideration will be settled via the issue of RCPS. As at Sept 30, 2018, Tropicana’s borrowings stood at RM1.99 billion compared with a cash balance of RM1.15 billion. But its gearing and debts came down over the years with some asset sales, like that of Tropicana Mall. ![]() The company’s borrowings grew further to RM1.92 billion in the following year. Tropicana’s debts soared to more than RM1 billion in 2012 - the year Tan undertook a massive asset injection. In other words, my private companies have no more rights to develop the projects,” Tan explains. “No land will be injected into the JVs but the exclusive development rights will be assigned to Tropicana. The total estimated GDV of the proposed JV developments is RM6.7 billion. In the meantime, Tropicana is forming joint ventures (JVs) with Cenang Resort Sdn Bhd, Sinaran Ramah Sdn Bhd, Pantai Kok Resort Development Sdn Bhd, Suci Padu Sdn Bhd and Ibarat Indah Sdn Bhd to develop four tracts measuring a total of 1,328.76 acres in Pulau Langkawi and Pekan Nenas in Johor. The completion of the corporate exercise and proposed collaborations will bring Tropicana’s land bank to a total of 3,572.6 acres with a combined GDV in the pipeline of RM78.12 billion, which should keep the company busy for 10 to 15 years. The only thing left will be my residence,” he jokes. “After this injection, I will have no more privately owned commercial land. Instead, all recent acquisitions were made directly by Tropicana. He says that while he was planning the asset injection, he stopped buying land under his private companies. I want to solve the problem, once and for all,” Tan tells The Edge in an exclusive interview. “The analysts think this (potential conflicts of interest) is the reason our shares don’t do well. That, he adds, is the rationale for the massive asset injection. Tan, who is back in the company’s driving seat, highlights research analysts’ concerns over potential conflicts of interest, given the fact that he owns many private assets that are collectively worth as much as the listed Tropicana. The property developer will acquire land bank of 1,116.88 acres in the Klang Valley and Johor with a potential total gross development value (GDV) of RM24.82 billion. On top of that, the company will assume bank borrowings of RM271.8 million from Tan. It is a cash-plus-equity deal in which Tropicana will issue 1.11 billion new redeemable convertible preference shares (RCPS) and pay RM247.1 million cash. Tan stresses that the assets are being injected at a 17.9% discount to the indicative market value. In the exercise, which is somewhat of an amalgamation, Tan and his family will dispose of 12 privately owned companies that collectively own 787.72 acres of land across the Klang Valley and Johor for RM1.85 billion. It is the property tycoon’s biggest injection ever this time around and he says it will be the last one. ![]() TROPICANA Corp Bhd founder and major shareholder Tan Sri Tan Chee Sing is injecting real estate into the listed entity again.
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