KUALA LUMPUR (Dec 25): Malayan United Industries Bhd (MUI) is to sell a 4.1ha plot of land in Scotland for £7.2 million (RM38.8 million), for a gain of £2.9 million (RM15.6 million) or 0.5 sen per share.
MUI said its indirect wholly-owned subsidiary, Corus Hotels Ltd, has entered into a deal with Scottish property developer AR Land Investments Ltd to sell the freehold land located in Edinburgh.
“Approximately 50% of the proceeds will be used to repay the vendor’s bank borrowing while the balance will be utilised as working capital,” said MUI in a filing with the stock market.
MUI said the move was in line with its strategy of divesting non-core assets, as well as its continuing efforts to reduce its bank borrowings.
The group said the initial cost of acquiring the land could not be determined at this current juncture as it was purchased together with a portfolio of hotels in the UK in 2001. But the carrying amount of the land is £4.1 million (RM22.1 million).
As a result of the land’s disposal, the group’s gearing level would go down to 1.29 times, from 1.36 times currently.
Meanwhile, its borrowings would decrease to RM802.82 million, from the RM822.23 million posted at the end of its financial year ended June 30, 2019.
The proposed disposal is expected to be completed in three months’ time.
MUI’s share price closed unchanged at 20.5 sen, giving it a market capitalisation of RM601.18 million. The counter saw 31,000 shares traded yesterday.