TAFI’s RM23.5 mil Muar factory disposal progresses after conditions precedent met

PETALING JAYA (June 30): TAFI Industries Bhd’s disposal of its freehold industrial property in Bukit Pasir, Muar, Johor has progressed following confirmation that all conditions precedent under the sale and purchase agreement (SPA) have been fulfilled.

The Bursa filing update, dated yesterday, relates to the transaction first announced on Dec 3, 2025, under which subsidiary T.A. Furniture & Projects Sdn Bhd (TAFPSB) is selling the property to Bripanel Industries Sdn Bhd for a cash consideration of RM23.5 million.

Bripanel is a wholly owned subsidiary of Dominant Enterprise Bhd.

The property comprises freehold industrial land held under GM 163 Lot 267, Mukim Sungai Terap, Muar, together with a factory building located at No 267, Jalan Raja, Kawasan Perindustrian Bukit Pasir, Johor. The site has a land area of approximately 2.074 hectares and a gross built-up area of about 149,753 sq ft, and is currently used for furniture manufacturing and office purposes.

TAFI acquired the asset in 2005 at an original cost of RM9.1 million. It had a net book value of RM6.6 million as at June 30, 2025. An independent valuation by VPC Alliance (PJ) Sdn Bhd in 2025 placed the market value at RM22.5 million.

The board previously stated that the valuation was conducted on a market value basis using the cost method, with land value derived via comparison of similar industrial property transactions and asking prices, and building value based on replacement cost less depreciation.

The SPA previously included conditions precedent relating to the existing solar photovoltaic installation at the property under the Net Energy Metering programme, including approval for transfer of account ownership and execution of a novation agreement with Tenaga Nasional Bhd. The latest filing confirms that these conditions have been satisfied.

TAFI said the disposal forms part of its decision to discontinue its own loss-making furniture manufacturing operations at the Muar facility, while continuing in the furniture business through third-party suppliers and manufacturers. The group expects the transaction to improve cash flow and allow greater focus on its property development and construction businesses.

Based on the RM23.5 million consideration, TAFI expects an estimated gain on disposal of approximately RM13.0 million, or RM9.75 million depending on the final treatment of the solar PV arrangements. The group estimates the transaction will increase earnings per share and net assets per share by about 3.4 sen or 2.6 sen respectively for the financial year ending June 30, 2026.

The net proceeds will be used for working capital, Real Property Gains Tax payments, investment opportunities as they arise, and repayment of bank borrowings within the group. The disposal is not subject to shareholder approval under Bursa Malaysia Listing Requirements, apart from state authority consent for the land transfer.

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