KUALA LUMPUR (June 17): Boustead Plantations Bhd is disposing of eight parcels of freehold land totalling 159.15ha in Kulaijaya, Johor, for RM94.22 million.
Upon completion of the proposed disposals, Boustead Plantations is expected to realise an estimated gain of RM121.74 million (net of taxation and estimated expenses), or about 7.6 sen per share for the financial year ending December 2015.
The group’s net gearing ratio will also be reduced to 0.29 times from 0.37 times currently.
In a filing with Bursa Malaysia yesterday, Boustead Plantations said it had on Monday entered into two sale and purchase agreements (SPAs) for the proposed disposals.
The first SPA was between CIMB Trustee Bhd and Sanggul Suria Sdn Bhd for the disposal of three parcels of land in Kulaijaya, which have a collective land size of 57.03ha, for RM12.28 million.
The second SPA was between its wholly-owned subsidiary Boustead Sungai Manar Sdn Bhd and Hanson Quarry Products (Segamat) Sdn Bhd for the proposed disposal of five parcels of land in Kulai, measuring 102.12ha for RM81.94 million.
The pieces of land are currently used for quarry and/or plantation-related activities.
“The total audited net book value of the land as at Dec 31, 2014 was RM14 million,” it said.
Boustead Plantations said the deal would offer a good opportunity for the group to unlock and realise the value of its investments in the land.
“Further, the proposed disposals will enable us to dispose of all of the quarry-related activities which are non-core to us,” it said.
The group plans to use the proceeds from the disposals to repay bank borrowings and/or for working capital.
The proposed disposals are expected to be completed by the fourth quarter of 2015.
This article first appeared in The Edge Financial Daily, on June 17, 2015.
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