Guocoland is disposing of Sepang land to Putrajaya Properties for RM475m

KUALA LUMPUR (Oct 19): Guocoland (M) Bhd's associate Vintage Heights Sdn Bhd is disposing of a 679.2ha land in Sepang, Selangor, to Putrajaya Properties Sdn Bhd for RM474.99 million cash.

Upon completion of the proposed disposal, Vintage Heights is expected to realise a net gain on disposal of approximately RM290 million. About RM116 million is expected to be attributable to Guocoland.

"The net gain attributable to owners of the company represents an increase in earnings per share and net assets per share of the company of 17.31 sen," said Guocoland in a filing with Bursa Malaysia today.

Guocoland said Vintage Heights had on Friday signed the conditional sale and purchase agreement with Putrajaya Properties and Hap Seng Consolidated Bhd for the proposed disposal.

Hap Seng Consolidated is a shareholder of Vintage Heights, which had on March 27, 1992 acquired the land from Hap Seng Consolidated. The cost of investment stood at RM50.48 million then.

The market value of the land has since increased to RM203.15 million based on valuation by CB Richard Ellis (M) Sdn Bhd as at Jan 31, 2013. The net book value of the land stood at RM84.16 million as at June 30, 2015.

Guocoland said the proposed disposal would enable Vintage Heights to realise its investment in the property. The latter plans to use the proceeds for working capital purposes, repayment of borrowings and/or distribution to its shareholders.

Guocoland said the proposed disposal was expected to be completed in the second half of 2016.

According to the company, part of the land measuring 0.3ha (0.75 acres) is to be surrendered by Vintage Heights to the relevant authorities in Selangor. As such, Vintage Heights is proposing to sell to Putrajaya Properties the land excluding such portion.

The land is currently an oil palm plantation tract with trees aged between 23 and 36 years. The average yearly fruit bunches harvested for the past three years was 3,457.5 tonnes.

Still, the land disposal is subject to two conditions precedent being fulfilled by Vintage Heights. These include the completion of the surrender procedure with the title document for the property reissued by the Selangor authorities.

The transaction also needs the approval of the Estate Land Board for the transfer of the property from Vintage Heights to Putrajaya Properties.

At 12.30pm, Guocoland shares were unchanged at RM1.21 for a market value of 847.6 million. A total of 65,100 shares changed hands.