KUALA LUMPUR (Nov 15): Sunsuria Bhd (KL:SUNSURIA) said it is acquiring a 20% stake in property developer KL City Gateway Sdn Bhd (KLCG) for RM10.47 million, and will inject about RM40 million in shareholder advances to the company.

Sunsuria on Friday entered into an agreement with Scenic Starhill Sdn Bhd to acquire the 20% stake in KLCG, which is the developer of a 9.66-acre site in Kampung Sungai Baru. Kampung Sungai Baru is located in Kampung Baru in the heart of Kuala Lumpur.

Upon completion of the stake acquisition, the shareholders of KLCG will be Suez Capital Sdn Bhd (holding a 56% stake), followed by Sunsuria (20%), Transworld Equity Sdn Bhd (12.75%), Yedor Holdings Sdn Bhd (5%), Yeoh Ah Tu (5%) and Scenic Starhill (1.25%), said Sunsuria in a bourse filing.

The acquisition is deemed a related party transaction due to the interests of Sunsuria executive chairman and major shareholder Tan Sri Ter Leong Yap and his daughter Ter Shin Nie, who is a non-independent executive director of the company. His brother Datuk Ter Leong Hing, meanwhile, is a director and major shareholder of Scenic Starhill and Suez Capital and Transworld.

Sunsuria said Phase 1 of the Kampung Sungai Baru land development, involving residential and serviced apartment, business suites, commercial and retail lots, has an estimated gross development value of RM2.68 billion.

Meanwhile the estimated cost for the Phase 1 development is RM1.35 billion, which will span across nine years from 2025 until 2034.

The estimated total shareholder advances needed to fund the Phase 1 development is RM200 million, of which Sunsuria's portion works out to be RM40 million.

Sunsuria said the KLCG stake consideration and shareholder advances will be funded via the company’s internally generated funds and/or bank borrowings.

Shares of Sunsuria closed unchanged at 50.5 sen on Friday, giving the company a market capitalisation of RM452.44 million. Year-to-date, the stock has risen 10.98%.