Dolomite to sell quarry unit to Sunway for RM125m

KUALA LUMPUR (June 4): Dolomite Corp Bhd’s wholly-owned subsidiary Dolomite Industries Co Sdn Bhd (DICSB) has entered into a share sale agreement with Sunway Holdings Sdn Bhd (SHSB), for the proposed sale of its entire equity interest in Dolomite Granite Quarry Sdn Bhd (DGQSB) for RM125 million.

According to a filing with the bourse, the disposal consideration comprises a cash amount of RM100, together with advances of RM125 million by SHSB to DGQSB.

DGQSB had previously entered into a sale and purchase agreement to acquire lands, plant and machinery for RM125 million from DICSB, which has yet to be completed.

The lands, measuring a total of 317.2ha, are located in Ulu Langat, Selangor, with a net book value of RM4.1 million as at June 30, 2018.

The plant and machinery involved comprise two production lines, including eight units of crushers, vibrating screens, conveyor belt system, dust suppression system and surge pile tunnel, which are all currently encumbered in favour of Maybank Labuan.

The group said the disposal consideration of RM125 million represents a premium of RM2 million or 1.6% to the market value of the lands, plant and machinery, based on a preliminary valuation of RM123 million.

“The proposed disposal allows the company to unlock the value of its quarry assets. The proceeds from the proposed disposal is expected to reduce the group’s gearing, after the utilisation of the advance for payment of redemption sum to Maybank Labuan.

“The loans secured from Maybank Labuan to Dolomite Power Shandong (HK) Limited had been utilised for the construction of a thermal power plant in Shandong province of China,” Dolomite said.

Upon completion of the sale, RM92 million of the proceeds will be used for payment of redemption sum to Maybank Labuan, while the balance will be used to facilitate the fees involved in the transfer of lands, to settle debts with creditors of DGQSB, payment of income tax and royalty payable, among others.

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