Equine sells Seri Kembangan land for RM19.6 million

KUALA LUMPUR: Equine Capital Bhd has sold its 6.04 acre leasehold commercial tract within Selangor's Seri  Kembangan enclave to Safetags Solution Sdn Bhd for RM19.6 million. Proceeds from the land sale will be used to finance the seller's working capital needs, and reduce debt.

In a statement to the exchange on Thursday April 29, Equine said its wholly-owned subsidiary Tujuan Ehsan Sdn  Bhd had entered into a sale and purchase agreement with Safetags for the disposal of the site.

"The land is charged to a local bank as part of the security of Equine group for its term loan facility with the  local bank," Equine said.

Equine said the site had been approved for commercial development with a transportation hub within the group’s  shelved Pusat Bandar Putra Permai township. The project was launched in 2007 but was shelved in financial year  2009 due to poor sales.

“Due to the poor sales response and, hence, uncertainty in the take-up rate of the sales units, the project’s viability has been assessed and categorised as a project with significant sales risks and, therefore, high risk  of returns.

"Thus, to sell the land would be a better alternative option than to develop the land or leave it idle,” Equine   said.

The land disposal, due for completion by January 2011, is expected to contribute a profit after tax of RM7.4  million in Equine's accounts for current year ending March 31, 2011.

Equine had acquired the land in 1999 for RM1 million. The site has an existing market value of RM11.8 million,  based on the latest valuation undertaken by Colliers, Jordan Lee and Jaafar Sdn. Bhd earlier this month.