Johan to sell land to OSK unit for RM127 mil

KUALA LUMPUR (Nov 28): Johan Holdings Bhd is selling a piece of industrial land measuring some 28 acres within the Taman Meranti Jaya mixed development in Puchong, Selangor, to OSK Holdings Bhd for RM127 million.

According to Johan, RM108 million will be paid in cash while the remainder will be fulfilled via the ownership transfer of seven units of properties as payments in kind of an agreed value of RM19 million.

For this, Johan said its wholly-owned subsidiary Prestige Ceramics Sdn Bhd, being the registered proprietor, has signed a conditional sale and purchase agreement (SPA) with Aspect Potential Sdn Bhd, a wholly-owned unit of OSK Property Holdings, which in turn is 99.93%-owned by Main Market-listed OSK Holdings.

As at Oct 31, industrial buildings — including a single-storey detached factory with a two-storey office block, a warehouse and storage building — and other miscellaneous structures are erected on the parcel of land.

Johan deems the proposed disposal an opportunity to divest the currently dormant property, which it said will strengthen its cash flow.

This is because Johan will, via PCSB, raise cash proceeds amounting to RM108 million from the transaction, of which RM45 million will be received in three instalments over five years.

Excluding expenses for the proposed disposal, Johan plans to use RM14.75 million for the repayment of a term loan and RM35.60 million for general working capital.

The bigger chunk of RM45 million is for its future investment opportunities or general working capital, which at present has yet to be identified.

However, the proposal is expected to result in a pro forma loss totalling RM12.51 million, after taking into account the asset's net book values and estimated expenses and taxes.