SINGAPORE (Nov 23): Capital World is planning to develop a 207.5-acre township in Johor near Pengerang Integrated Petroleum Complex.

In a Thursday filing, the Malaysian developer says wholly-owned subsidiary Baiduri Megaria has acquired a 100% stake in Kekal Efektif, an investments and property development firm, for RM63 million ($20.6 million).

Kekal holds the joint development right to develop five plots of 99-year leasehold lands with a total area of 207.5 acres owned by Yayasan Pelajaran Johor, an education foundation established by the Johor State Government. This joint development right expires on Jan 18, 2114.

Upon completion of the acquisition, Capital World will assume the joint development right to develop a township at Pantai Timur, District of Kota Tinggi.

The township is located along Jalan Kg. Punggal – Desaru and is 22 kilometres from the north-east of the Pengerang Integrated Petroleum Complex (PIPC), the upcoming regional downstream oil storage and trading hub located on a single plot measuring about 20,000 acres.

Saudi state oil company Saudi Aramco will be investing over US$7 billion ($9.4 billion) in Petronas’ Refinery and Petrochemical Integrated Development project within the PIPC. The project is expected to commence operation in 2019.

Capital World says it intends to fund the transaction by cash generated from operations, as well as financing obtained in early Nov this year.

Shares in Capital World closed 3.5% lower at 8.3 cents on Wednesday.