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IJM Land to dispose property for RM66.26 million

KUALA LUMPUR: IJM Land Bhd is proposing to dispose of its 100% stake comprising 250,000 ordinary shares at RM1 each to ADF Tiger III Limited, a foreign fund incorporated in Bermuda for RM66.26 million.

Delta Awana is principally involved in property investment and owns two parcels of leasehold land in Melaka that expires on Feb 2, 2095. The land measures 118,827.2 sq m, and includes a newly completed shopping mall that has been leased to Aeon Co. (M) Bhd for an initial term of 10 years commencing Feb 2, 2010.

IJM Land said that the proceeds from the proposed disposal will be used for working capital of the group, and is expected to be completed by the last quarter of 2010.

The purchase price was arrived at on a willing-buyer-willing-seller basis after taking into consideration the projected adjusted net asset value of Delta Awana on completion of the proposed disposal and the market value of the property.

“The net book value of the property as at March 31, 2010 was RM319.4 million. No valuation was carried out on the property for the proposed disposal,” the company said. It added that the rationale of the proposed disposal is to enable the group to unlock the value of its investment.

ADF Tiger will pay the purchase price in stages or initially RM18.85 million upon execution of the share sale and purchase agreement (SSPA), another RM18.85 million within 15 business days from the date of execution of a lease agreement between Delta Awana and Aeon and the balance of the purchase price would be paid upon completion of the proposed disposal.

“The lease agreement will be executed after obtaining the approval of the relevant State Authority for registration of the lease,” IJM said in its announcement to Bursa on Thursday, June 24.

IJM Land said that the expected gain from the proposed disposal is approximately RM64 million and added that the proposed disposal is in the best interests of the group.

“Other than the gain on the Proposed Disposal, the Proposed Disposal will not have any significant effect on the earnings or net assets per share, substantial shareholders’ shareholding, gearing and share capital of the Group for the financial year ending 31 March 2011,” it added.
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