It is proposing to raise RM90.8 million by disposing of 700 million shares in Talam Corp Bhd, a property developer. K-Euro has 26.51 per cent interest in Talam.
Abdul Hamid said that some RM40 million of the money raised will be used to pare its debts.
He added that K-Euro will look at other avenues to reduce its debt to some RM100 million by the year-end, which will see savings on interest of more than RM2.5 million a year.
"We expect K-Euro to do better going forward. Talam has over 1,200ha of undeveloped land in Selangor with gross development value of over RM8 billion. There will be five to six new projects next year and this will contribute to our earnings," Abdul Hamid told reporters after K-Euro's extraordinary general meeting (EGM) in Kuala Lumpur yesterday.
Last year, K-Euro posted a net loss of RM33.1 million. In the first quarter ended April 30 2010, its net loss was RM3.4 million.
The Canal City, located near Kota Kemuning and Putra Heights in Selangor, is a mixed development of 800ha. The 50:50 joint venture between K-Euro and IJM Corp Bhd will be developed over 15 years from the second half of next year.
Abdul Hamid said that K-Euro was also banking on the RM3.5 billion West Coast Highway project to improve future earnings.
The company is negotiating with the federal government to extend the concession agreement and for changes to be made to the terms and conditions to ensure the project is fundable.
"The project is there, but, technically, it has lapsed as we could not achieve our financial closure," he said.
The highway project was mooted in 1996, but has encountered delays because of several factors.
Abdul Hamid said the delays have caused project costs to increase by some 30 per cent, citing higher prices of building materials and changes to the alignment among the factors.
by Business Times
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