Sapura Industrial to sell Melaka land for RM10.5 million cash

PETALING JAYA (July 9): Sapura Industrial Bhd (SIB) has signed a sale and purchase agreement (SPA) to dispose of a piece of vacant industrial land in Melaka for RM10.48 million cash, with the proposed disposal providing an opportunity for the group to realise the capital appreciation of the property, according to its filing with Bursa Malaysia.

The automotive components manufacturer said in a Bursa Malaysia filing yesterday that it had signed an SPA on July 8 with Loongsen Plastics (M) Sdn Bhd for the proposed disposal of a 2.163ha industrial parcel in Mukim Bukit Katil, Ayer Keroh, in the Melaka Tengah district.

The property, held under H.S.(M) 549, Plot 98, is a 99‑year leasehold land expiring on Oct 22, 2073. The total cash consideration for the proposed disposal is RM10,477,260. SIB said the proposed disposal is conditional upon the terms and conditions set out in the SPA and will be undertaken on an “as is where is” basis, subject to the fulfilment of several conditions precedent.

Deal rationale: From plant expansion to capital realisation

The board said the property was originally acquired by the company to expand its plant in Melaka and has since been held as an investment for about 25 years.

“Having held the asset as an investment for twenty five (25) years and having considered the need for an expansion of plant in other areas which are in closer proximity to the Company’s or its subsidiaries’ customers, the Board believes that the Proposed Disposal is timely,” SIB said.

According to the filing, the proposed disposal provides an opportunity for the company to realise the capital appreciation of the property. The board said the transaction will allow SIB to unlock the value of its noncore assets and convert them into liquid funds for more productive operational use and other expansion opportunities.

SIB added that, barring unforeseen circumstances, the proposed disposal is expected to be completed by the first half of the company’s financial year ending 2028. The company said further announcements will be made if there are material developments relating to the proposed disposal.

SPA conditions and payment structure

The conditions precedent under the SPA are to be fulfilled within six months from the date of the agreement.

They include obtaining written consent from the relevant state authorities to transfer the property to Loongsen Plastics, at the cost and expense of the company. If the purchaser finances the acquisition via a loan, SIB is also required, at the cost and expense of the purchaser, to secure the written consent from the state authorities to charge the property to the purchaser’s financier.

Another condition precedent is the delivery of a written confirmation from the company to the purchaser or its solicitors that the existing tenancy agreement between the company and the existing tenant has been terminated, and that vacant possession of the property has been re‑delivered by the tenant. The SPA will become unconditional on the date the last of these conditions precedent is fulfilled or waived, to the extent permitted by law.

The RM10.48 million sale consideration will be satisfied entirely in cash. The purchaser will pay a 10% deposit, comprising a 2% earnest deposit of RM209,545.20 which has already been placed with the appointed escrow solicitors, a further 3% of RM314,317.80 to be paid to the purchaser’s solicitors as stakeholder to be applied towards real property gains tax, and the remaining 5% of RM523,863 to be paid to the escrow solicitors as stakeholder on the date of the SPA.

The escrow solicitors are authorised to release the earnest deposit and the balance deposit, together with all interest earned, to the company on the unconditional date.

The remaining 90% of the sale consideration, amounting to RM9,429,534, is to be paid by the purchaser to the escrow solicitors within 90 days from the unconditional date. The purchaser is entitled to an automatic 30‑day extension from the completion date to pay the balance, provided that it pays interest at 8% per annum on any unpaid amount, calculated on a daily basis, from the day after the completion date until the date of actual payment.

Vacant possession of the land, free from all encumbrances and claims, must be delivered by SIB to the purchaser within three working days after the company receives the full sale consideration. If SIB fails to deliver vacant possession by then, it will be liable to pay the purchaser interest at 8% per annum on the total sale consideration, calculated on a daily basis, from the day following the date of possession until the date vacant possession is actually delivered.

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