Sapura Industrial plans RM42.33 mil land sale to fund automotive expansion

PETALING JAYA (July 2): Sapura Industrial Bhd (SIB) has signed a sale and purchase agreement (SPA) to dispose of two adjoining leasehold industrial land parcels in Bandar Baru Bangi, Selangor, for a total cash consideration of RM42.33 million, in line with the group’s move to realise capital appreciation from long‑held properties and redeploy funds into its core operations.

Details of the proposed disposal

Sapura Industrial said in a Bursa filing yesterday that it had entered into the SPA on the same day with Zeito Plastic Components Sdn Bhd (ZPC) for the disposal of two vacant 99‑year leasehold industrial plots known as Lot 5 and Lot 7 in Persiaran Usahawan, Taman IKS, Section 9, Bandar Baru Bangi.

The subject properties comprise:

1) Lot 5: Leasehold industrial land under PN 106755, Lot 48474, measuring about 20,461 sq m, currently classified as rental property, with part of the land (about 4,046 sq m) leased until Aug 31, 2026 and another portion (about 743 sq m) leased on a monthly basis.

2) Lot 7: Leasehold industrial land under PN 106756, Lot 48475, measuring about 20,503 sq m, also classified as rental property, with about 4,046 sq m leased until Sept 30, 2026.

Together, the plots have an aggregate land area of about 40,964 sq m and are registered under Sapura Industrial.

The disposal consideration of RM42,329,903.62 was negotiated on a willing‑buyer willing‑seller basis after taking into account the independent market value of the properties of RM40.60 million as at April 30, 2026, ascribed by Raine & Horne International Zaki + Partners Sdn Bhd using the comparison approach, Sapura Industrial’s original combined investment cost of RM12.10 million, and the aggregate net book value of RM9.10 million as at January 31, 2026.

Payment structure and conditions

The consideration will be settled entirely in cash in stages as follows: a 2% earnest deposit of RM846,598.07 already paid on June 8, 2026, a further 5% balance deposit of RM2,116,495.18 and a 3% retention sum of RM1,269,897.11 to be paid within seven working days of the SPA, with the remaining 90% balance purchase price of RM38,096,913.26 payable within 90 days from the date the last condition precedent is fulfilled.

If the balance purchase price is not paid within this completion period, the vendor will automatically grant a 30‑day extension, during which late interest at 8% per annum on the outstanding balance will apply.

Completion of the disposal is subject to conditions precedent including approval from Sapura Industrial shareholders at an extraordinary general meeting, consent from the relevant state authority for the transfer (and, if applicable, for a charge), confirmation that existing tenancies have been terminated and vacant possession delivered, and any required approval or letter of no objection from the Economic Planning Unit.

Information on the purchaser

ZPC, incorporated in Malaysia in 1983, is principally involved in the manufacturing and marketing of remote control casings for television and video sets, sundry plastic components, as well as mould servicing and fabrication.

As at the latest practicable date, ZPC has an issued and paid‑up share capital of RM23.19 million comprising 23.16 million ordinary shares and is not a subsidiary or associate of Sapura Industrial.

Use of proceeds and rationale

Sapura Industrial plans to use the estimated gross proceeds of RM42.33 million broadly as follows: about RM23.12 million for expansion of its existing manufacturing, machining and assembly line for automotive products such as stabiliser bars, coil springs and brake discs; up to RM12 million for the acquisition of land or properties to build new plants closer to key customers; approximately RM3.11 million for working capital; and an estimated RM4.09 million to cover expenses related to the disposal, including professional fees, real property gains tax and other incidental costs.

The group said the subject properties were originally acquired in July 2004 to facilitate expansion of its plant in Bandar Baru Bangi, but the board now considers the disposal timely to unlock value at prevailing market levels and convert non‑core assets into liquid funds for more productive operational use.

Sapura Industrial has held the properties for more than 20 years and, based on its latest audited financial statements, expects to recognise an estimated net pro forma gain of about RM29.14 million after deducting the net book value and estimated disposal expenses and tax.pa

Financial effects and approvals

The proposed disposal will not have any effect on Sapura Industrial’s issued share capital or substantial shareholders’ shareholdings, as the transaction will be fully satisfied in cash and does not involve any new share issuance.

On a pro forma basis, assuming the disposal had been completed as at Jan 31, 2026, Sapura Industrial’s net assets per share would increase from RM1.65 to RM2.05, while gearing would improve from 0.40 times to 0.32 times, based on total borrowings over total equity attributable to owners of the company.

For illustrative purposes, if the disposal had been completed at the beginning of the financial year ended Jan 31, 2026, earnings per share would rise from 10.11 sen to 49.40 sen, reflecting the one‑off pro forma gain of RM29.14 million.

The highest applicable percentage ratio for the disposal is 35.19% based on the disposal consideration compared with Sapura Industrial’s audited consolidated net assets of RM120.29 million, making it a significant transaction under Chapter 10 of the Main Market Listing Requirements.

The proposed disposal is subject to approval from Sapura Industrial shareholders at an EGM and any other relevant authorities or parties, if required, and is expected to be completed by the first half of 2027, barring unforeseen circumstances.

..........

Read about emerging trends, data-backed insights, growing subsectors, and expert commentaries in EdgeProp print. Subscribe now for your free copy!