Sapura Industrial proposes RM42.33m sale of 10.12-acre Bangi industrial land

PETALING JAYA (Aug 28): Sapura Industrial Bhd is proposing to sell two adjoining parcels of industrial land in Bandar Baru Bangi, Selangor, to Zeito Plastic Components Sdn Bhd for RM42.33 million cash, with the disposal expected to generate a pro forma gain of about RM29.14 million.

In a Bursa Malaysia filing on Friday (Aug 28), Sapura Industrial said the proposed disposal involves 99-year leasehold Lots 48474 and 48475 in Taman IKS, Seksyen 9, Bandar Baru Bangi. According to its circular to shareholders dated the same day, the two parcels have a combined land area of 40,964 sq m, or about 10.12 acres, with both leases expiring on July 18, 2103.

Sale at 4.26% premium to valuation

The properties were ascribed a combined market value of RM40.6 million as at April 30, based on a valuation by Raine & Horne International Zaki + Partners Sdn Bhd using the comparison approach.

The RM42.33 million consideration represents a RM1.73 million, or 4.26%, premium to the valuation. It was arrived at on a willing-buyer, willing-seller basis, taking into account the valuation, the properties’ original acquisition cost and net book value.

Sapura Industrial acquired the two plots in July 2004 for a combined RM12.1 million. Their aggregate net book value stood at RM9.1 million as at Jan 31, 2026.

The group expects to recognise a pro forma gain of about RM29.14 million upon completion of the disposal.

The parcels are described as adjoining vacant industrial land, although portions are subject to short-term tenancies. The properties generated RM570,000 in rental income in the financial year ended Jan 31, 2026.

Two of the three tenancies were due to expire on Aug 31 and Sept 30, respectively, while the remaining tenancy continues on a month-to-month basis. Sapura Industrial said the loss of rental income following the disposal is not expected to have a material adverse impact on the group.

Proceeds to support expansion and working capital

Sapura Industrial said the properties were originally acquired to expand its Bandar Baru Bangi plant. It subsequently decided that expanding its existing plants located closer to customers would better meet the group’s requirements.

The proposed disposal would allow it to unlock the value of assets it considers non-core, realise their capital appreciation after more than 20 years of ownership and convert them into cash for more productive operational use.

The group intends to use the gross proceeds for the expansion of its manufacturing, machining and assembly lines, potential acquisitions of land or properties, working capital and expenses related to the disposal.

It said the disposal consideration will not be used to fund its separate proposed financial assistance to SIB ZZT Sdn Bhd.

Up to RM58m assistance for battery-component JV

Separately, Sapura Industrial is seeking shareholders’ approval to provide financial assistance of up to RM58 million to SIB ZZT, its 51%-owned joint venture involved in manufacturing lithium-battery components.

The proposed assistance comprises RM19.9 million in temporary interest-free bridge financing, corporate guarantees of up to RM10 million and RM20 million for two proposed banking facilities, and industrial land in Gurun with a collateral value of RM8.1 million.

The Gurun land is owned by Perbadanan Kemajuan Negeri Kedah and leased to Sapura Automotive Industries Sdn Bhd. Consent from the state development corporation is required before a charge can be created over the land.

SIB ZZT’s Gurun manufacturing facility was completed on July 31 at an estimated development cost of RM54.1 million and is expected to begin operations in the third quarter of 2026.

The facility is intended to produce prismatic cell lids and prismatic cell cans, with its production lines expected to have a combined capacity of 72,000 pieces a day upon commissioning.

SIB ZZT has a product and material supply agreement with EVE Energy Malaysia Sdn Bhd to supply precision structural components and related materials for prismatic lithium-battery production at EVE Malaysia’s facility in Kulim, Kedah. The agreement runs initially until Oct 31, 2030, with provision for automatic annual renewal thereafter.

As at Aug 3, EVE Malaysia was SIB ZZT’s sole customer, although the joint venture is not contractually restricted from securing business from other customers.

The circular said termination of the EVE Malaysia agreement could require SIB ZZT to assess the manufacturing facility for impairment and leave it bearing fixed operating, lease and maintenance costs while it seeks another commercial customer.

Completion targeted for 2Q2027

The proposed disposal and financial assistance are subject to shareholders’ approval at Sapura Industrial’s extraordinary general meeting on Sept 15. The land sale is also subject to the relevant approvals and consents.

Barring unforeseen circumstances and subject to all required approvals being obtained, the disposal is expected to be completed in the first half of 2027, with completion tentatively targeted for the second quarter.

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