Talam Reveals Plans to Reduce RM1.2 Billion in Debts
Here’s some news that Talam housebuyers may find intriguing. On April 21, chairman Tan Sri Chan Ah Chye announced that the company will cease to be a high-volume housing developer due to oversupply and rather concentrate on fewer but quality homes. This was revealed as part of Talam’s plans to reduce the massive RM1.2billion debts accumulated in the past few years since running into financial difficulties.
Talam recently signed a memorandum of understanding (MoU) with an unnamed financer (which is one of the company’s major lender) to enable them to complete its existing houding projects in Klang Valley, involving as many as 12,00 units. Most of these units are said to be half-completed and are planned to be copleted by this year end.
In a report in the Edge, the following were also announced:
- With the backing of the financier, Talam plans to reduce their debts of RM1.2 billion by about 70%. 70% of that sum comes to about RM840million.
- Chan said construction costs of the units in the Klang Valley were estimated at RM700 million to RM800 million. Among the locations of the projects were Puchong, Kinrara, Bukit Jalil and Ulu Kelang.
- He added the units were “billable at RM1 billion”. The RM200 million to RM300 million in “surplus” from the sale would be used to partly settle its borrowings. However, whether the massive LAD hit on these projects were taken into account for these figures remain unclear.
- Under the corporate financial restructuring proposal, Talam would appoint a reputable principal contractor, IJM Corporation Bhd, to provide a guarantee to complete the projects according to schedule and of high quality.
- principal contractor would be covered from the progress building and money from the escrow account with the balance to be utilised to redeem the commitments to the financier. Any shortfall would be covered by Talam under the terms that are palatable and acceptable to all parties.
- Chan also explained that Talam and its subsidiaries, which were in the past were volume players in the property sector, building an average 10,000 units of affordable home annually from 1999 to 2003. Since its inception in 1986, it had completed more than 100,000 units in the Klang Valley.
- He also noted that during the heydays, the Talam group generated about RM20 million to RM25 million of billings every week with 60% of the collection allocation for construction costs, 30% to settle bank loans and 10% operation overheads and dividend payment.
Property Malaysia says: Well, we supposed that this would do for some good news, as opposed to years of silence from the much maligned Talam and its corporate leader. For some of the feedback from the buyers, you can check out this posting and the comments.
Other postings you may want to read:
Talam: Tan Sri Chan Ah Chye
Bright Future for IJM Properties
Talam’s Many Problems
