ABU! ABU! ABU!

Dijaya originally bid only RM895 million (payable over 20 years) while SP Setia Berhad bid RM1.15 billion (payable over only 6-8 years) and Mah Sing Group Bhd bid RM945 million (payable over only 7 years). This means Dijaya cannot get the deal because their bid is the least attractive of the three. Dijaya was then asked to up their price to RM1.3 billion in a  ‘behind-the-scenes’ negotiation.

THE CORRIDORS OF POWER

Raja Petra Kamarudin

I am glad that a lot of dirt was revealed recently regarding the billions of ringgit worth of ‘rush jobs’ that Prime Minister Najib Tun Razak did to beat the 13th General Election deadline. Should a ‘caretaker government’ commit the country to billions of ringgit in contracts when there is always a possibility that the government may change the night of Polling Day?

Of course, there is nothing illegal here and we will not be able to indict and convict anyone for any crime. After all, although Parliament may have been dissolved, life must still go on and it is still business as usual. Nevertheless, there is still the issue of moral although the issue of legal does not arise.

If you just want to focus on legal issues while you ignore moral issues, then for a politician to be caught bonking another woman in a hotel room is not something illegal or criminal. However, it is certainly immoral. Hence the moral aspect of your actions must also be questioned even if there is nothing illegal in what you do.

Another moral issue is concerning the news item below regarding the RM1.3 billion deal (with a RM20 billion earning potential) involving the Selangor State ‘Caretaker’ Government and Dijaya Corporation.

According to the Selangor Menteri Besar, Tan Sri Khalid Ibrahim, the deal has not been finalised yet (MB says Dijaya deal not finalised). According to the market, however, it is actually a done-deal.

As I said, this is only a moral issue. Is it a done-deal or is the deal not yet finalised? There are mixed signals here. And should the caretaker government commit the state to this deal when there may be a possibility that the state government may change hands by dinnertime of 5th May 2013?

According to the critics of the deal, this is exactly why they are rushing the deal before 5th May 2013. Pakatan Rakyat is not sure whether it can retain the state so it wants the deal wrapped up before then.

That is one issue.

The second issue is: Dijaya originally bid only RM895 million (payable over 20 years) while SP Setia Berhad bid RM1.15 billion (payable over only 6-8 years) and Mah Sing Group Bhd bid RM945 million (payable over only 7 years). This means Dijaya cannot get the deal because their bid is the least attractive of the three. Dijaya was then asked to up their price to RM1.3 billion in a  ‘behind-the-scenes’ negotiation.

Why was Dijaya given the privilege of a behind-the-scenes negotiation and allowed a second bite of the cherry? This is what the other bidders are unhappy about. A tender is a tender and the highest price should get it (if all bidders equally qualify, of course). In this case, Dijaya was allowed to revise their price to out-bid the others.

Interestingly enough, the people behind Dijaya are Ronnie Liu, Teresa Kok and Azmin Ali. And even more interesting is the fact that Dijaya has ‘donated’ RM200 million to Pakatan Rakyat Selangor’s war chest. Furthermore, Azmin threatened to drop Khalid from a Selangor state seat if he objects to the deal and tries to block it (and if Khalid keeps quiet and supports the deal he would be given the Port Kelang state seat).

Now hold on a minute, I thought that the man behind Dijaya is Tun Dr Mahathir Mohamad’s crony, Tan Sri Dato’ Danny Tan Chee Sing! You mean Dr Mahathir’s cronies are also Pakatan Rakyat’s cronies?

Hmm…that is most interesting. No wonder Umno did not make any noise about this. Is this what ABU is all about? Reject Umno but keep giving the Umno cronies plenty of money under a Pakatan Rakyat government?

Well, what does Raja Petra Kamarudin know? After all, he is living in Manchester and does not know what is going on in Malaysia. And Pakatan Rakyat Selangor can certainly do with the RM200 million ‘donation’ to face the coming general election. And does not the ends justify the means (matlamat menghalalkan cara)?

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Dijaya buys land for RM1.3 billion, with potential GDV of RM20 billion

(The Edge) - Property developer Dijaya Corporation announced it has acquired 1,172 acres of prime development land in Canal City, Selangor.

In a statement, Dijaya said it has today entered into an agreement to acquire the state-owned land from Permodalan Negeri Selangor Bhd (PNSB) for about RM1.3 billion via a deferred payment method spanning up to 20 years.

The purchase consideration comprises land purchase price of RM587 million, interest cost, share of gross development value (GDV) and profit entitlement from the development.

“This land development is expected to contribute significantly to the group’s prospects in the coming years,” Dijaya said.

Dijaya said it will progressively fund the acquisition and development cost via internally generated funds and bank borrowings.

The land is targeted for an integrated self-contained township development with potential GDV of RM20 billion. It is earmarked for launch within two years.

Datuk Dickson Tan, its group managing director said: “With strong prospects for capital appreciation due to excellent accessibility, this project can potentially generate a GDV of up to RM20.0 billion when fully completed over its 15-20 year targeted development timeframe.”

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Dijaya Corp's RM1.3b Canal City site purchase 'favourable'

(The Star) - Dijaya Corp Bhd's acquisition of the 1,172 acres of land in Canal City for RM1.3bil is “favourable” due to its "cheap" price tag and payment terms which bodes well for its balance sheet, UOB KayHian Malaysia Research says.

"Although Dijaya's surprise landbank acquisition runs against our earlier assessment the company was in an asset monetisation and degearing mode, its acquisition of 1,172 acres of land in Canal City from the state of Selangor for effectively RM1.3bil (RM25.41per square foot) is deemed cheap," it said.

It maintained a "buy" call on the stock with a target price of RM1.65 per share as the Canal City land project would only be launched in 2015.

It said the staggered payment over 12 years would have minimal impact on Dijaya's balance sheet.

The research house said the RM1.3bil price tag was manageable as Dijaya had close to RM214mil cash, which should further strengthen based on its unbilled sales of close to RM1bil.

"The deal also includes an interest of 5% per annum of up to RM252mil (subject to waiver) and a gross development value (GDV) sharing totalling a minimum amount of RM458.3mil (out of a projected GDV of RM8.6bil)," the research house said.

It pointed out the land was next to IJM Land Bhd's Bandar Rimbayu, a development which attracted significant demand with over 6,000 registrants with first phase fully sold.

"With connectivity to five major highways, namely KESAS, LKSA, ELITE, SKVE and WCE (once it is ready), we believe Dijaya's cheap entry provides a good margin buffer for their integrated self-contained township development," it added.

UOB KayHian Research said the developer's latest acquisition would level up its landbank size and GDV significantly from 800 acres to 2,000 acres and RM50bil to RM70bil respectively. It also said Dijaya's realisable net asset value (RNAV) per share would be lifted to RM3.15 per share from RM2.35 per share, factoring in a conservative RM40 psf to the Canal City land.

"Pegging a similar discount of 30%, our target price could be lifted to RM2.32," it added.