“The proposed acquisition will enable the group to establish an additional source of recurring income and furthermore to benefit from potential capital appreciation of the property in the foreseeable future,” LB Aluminium said in a filing with Bursa Malaysia today.
It added that its wholly-owned subsidiary Albe Metal Sdn Bhd (AMSB) today entered into a sale and purchase agreement with Facade Treatment Engineering Sdn Bhd for the proposed acquisition. The industrial complex comprises a 2-storey office building, a 2-storey detached factory, two 1-storey detached factories and a guard house.
AMSB had also entered into a three-year tenancy agreement for Facade Treatment to rent the property at a rental rate of RM125,000 per month.
LB Aluminium said it will fund the proposed acquisition via internal funds and/or bank borrowings.
It added that the proposed acquisition will not have any material impact on the group's earnings per share for the financial years ending April 30, 2018 and 2019 (FY18 and FY19), but said the rental income will contribute positively to its earnings in FY19.
Upon completion of the proposed acquisition, the group’s net gearing ratio will increase to 0.26 times from 0.18 times as at April 30, 2017.
“Barring any unforeseen circumstances, the proposed acquisition is expected to be completed by the third quarter of 2018,” said LB Aluminium.
LB Aluminium shares fell 2.5 sen or 4.13% to close at 58 sen today, bringing it a market capitalisation of RM147.85 million. — theedgemarkets.com
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