Hap Seng Consolidated to gain RM18m from Tawau land sale

KUALA LUMPUR (Dec 4): Hap Seng Consolidated Bhd is disposing of two contiguous parcels of land in Tawau, Sabah to Goldcoin Ventures Sdn Bhd for RM24.23 million.

Hap Seng said the proposed disposals are in line with the group’s strategy for disposing of parcels of land located in non-strategic locations without immediate development potential. The proceeds from the exercise would be used to reduce the group’s borrowings and/or for working capital.

It added that the proposed disposals will give rise to a net gain of RM18.14 million. Assuming that the transaction is effected at the end of the financial year ending Dec 31, 2018, the group’s net gearing would have decreased from 0.65 times to 0.64 times.

In a filing with Bursa Malaysia yesterday, Hap Seng said its wholly-owned subsidiary Hap Seng Properties Development Sdn Bhd has entered into sale and purchase agreements with Goldcoin Ventures, an indirect wholly-owned unit of Hong Kong-based Lei Shing Hong Ltd, for the proposed land sale. Lei Shing Hong is 50.1% owned by Hap Seng’s major shareholder Tan Sri Lau Cho Kun.

The net book value of the land as at Dec 31, 2017 stood at RM306,357 including deferred development expenditure.

The proposed disposals are expected to be completed within one month.

This article first appeared in The Edge Financial Daily, on Dec 4, 2018.

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