Proposed RM380.0 Million Capital Reduction and RM80.0 Million Land Acquisition to Drive Strategic Growth
KUALA LUMPUR, 24 SEPTEMBER 2024 – Magma Group Berhad (“Magma” or the “Company”), a dynamic hospitality and investment holding company, today announced strategic corporate proposals aimed at strengthening its financial position and expanding its property development portfolio.
The key proposals include a RM380.0 million capital reduction and the acquisition of a 2.26-acre land in the sought-after Persiaran Dutamas area, Kuala Lumpur. These moves are part of Magma’s ongoing effort to position itself for sustainable growth and enhance shareholder value.
The proposed capital reduction will see Magma reduce its issued share capital by up to RM380.0 million. This action is intended to eliminate accumulated losses and improve the Company’s balance sheet, which in turn will provide the financial flexibility to support future growth initiatives. By creating a stronger financial foundation, Magma aims to boost confidence among stakeholders, including financial institutions, investors, and suppliers.
In addition to the capital reduction, Magma proposes to acquire a 2.26-acre land in the prime Persiaran Dutamas area for RM80.0 million. The land, which has received approval for a mixed-use development comprising service apartments and commercial spaces, presents a strategic opportunity to expand Magma’s property portfolio. The acquisition will be financed through a combination of RM8.0 million in cash and the issuance of 120.0 million new ordinary shares, along with Redeemable Non-Convertible Preference Shares (RPS).
Dato’ Sri Thomas Liang Chee Fong, Group Managing Director of Magma Group Berhad, stated, “The proposed capital reduction will allow us to reset our financial foundation, enabling Magma to pursue future growth with greater strength. At the same time, the acquisition of the Dutamas land represents a significant milestone for our property division. With its prime location and approvals in place, this acquisition will enhance our property development pipeline and contribute to the Company’s long-term growth strategy.”
He continued, “We believe these initiatives will not only strengthen Magma’s financial standing but also provide the flexibility to capitalise on new opportunities in both our core sectors of hospitality and property development.”
The Dutamas land is located approximately 8 kilometres from the Kuala Lumpur city centre and is well-connected to major roads and key infrastructure. The area is surrounded by established residential developments, schools, shopping centres, and government offices. Prominent landmarks such as KL Metropolis, MATRADE, and MITEC are also in close proximity.
With approvals already in place for two 34-storey towers consisting of service apartments and commercial spaces, the land is expected to generate significant value for Magma through its development potential.
The development project will be overseen by Magma Property Sdn. Bhd., the Company’s wholly owned subsidiary responsible for managing Magma’s property development operations. The commencement and completion dates for the development have yet to be determined.
These corporate proposals aim to strengthen Magma’s financial health, positioning the Company for continued growth and expansion. The capital reduction will not affect the existing shareholding structure but will better reflect the Company’s true financial standing, paving the way for future capital management initiatives.
