KUALA LUMPUR (Aug 23): Construction engineering company Gadang Holdings Bhd is selling a parcel of residential land located in Jalan Kolam Air, Taman Melawati for a total cash consideration of RM43 million to repay bank borrowings and for the group's working capital.

Its wholly-owned subsidiary Gadang Land Sdn Bhd (GLSB) has entered into a sale and purchase agreement with SkyRia Development Sdn Bhd (formerly known as Nusa Jutamas Sdn Bhd) to dispose of the leasehold land measuring 38,451 square metres, which comes with a development order and building plan approval for two 22-storey blocks of apartment comprising 479 units.

The purchase price of RM43 million was arrived at on a "willing buyer, willing seller" basis, said Gadang in an exchange filing.

According to the group, the proposed disposal is to strengthen the property division's cash flow position and to reallocate the group's cash flow to its bigger ongoing development and future development projects in the pipeline. These include projects in Gelang Patah, Johor and Semenyih and Cyberjaya in Selangor.

Furthermore, the group said the exercise — expected to be completed by the first quarter of 2022 — is in line with Gadang's strategy to pare down its existing borrowings to improve its gearing level.

Shares of Gadang fell one sen or 2.67% to close at 36.5 sen, with some 795,000 shares done. The company has a market capitalisation of RM262.25 million. The stock has dropped 19.78% from when it was trading at 45.5 sen apiece on April 6.

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