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Leon Fuat's unit acquiring property in Selangor for RM28m

KUALA LUMPUR (Feb 24): Steel product processor Leon Fuat Bhd's unit Supreme Steelmakers Sdn Bhd is acquiring about one hectare in Balakong Jaya Industrial Area, Selangor, along with the factory, warehouse and office building on it, for RM28 million.

Supreme Steelmakers entered into a conditional agreement to buy the property from Leon Fuat Holdings Sdn Bhd (LF Holdings), which is Leon Fuat's major shareholder with a 70.9 per cent stake.

At present, the property is tenanted by LF Holdings to Supreme Steelmakers for a monthly rental of RM9,000 or RM108,000 per annum, Leon Fuat said in a filing with Bursa Malaysia today.

It said the proposed acquisition would allow Leon Fuat group to mitigate the risk of increasing rental rates and/or the possible loss of right to use the rented premises. It will also have full control of its own steel processing plant, office and warehouse for better long-term business interests.

“The management believes that the property possesses favourable prospects and is suitable for Supreme Steelmakers to carry out its business operations on a long-term basis, given that the property is strategically located within the Balakong Jaya Industrial Area,” it said.

In addition, Leon Fuat said the bigger total gross built-up area of the factory and warehouse of about 3,400 square metres was sufficient for Supreme Steelmakers to carry out its steel trading and steel processing operations without the need to rent another factory to cater for its needs.

The company said the purchase consideration would be satisfied entirely in cash, which would be funded via a combination of internally generated funds and bank borrowings.

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