KUALA LUMPUR: Indah Paper Industries Sdn Bhd (IPISB) is acquiring a plot of land in Klang, Selangor, measuring 263,930 sq ft for RM7 million, parent company Minho (M) Bhd said in a filing to Bursa Malaysia on Dec 29.

The industrial paper bag manufacturer and distributor entered into sale and purchase (S & P) agreements with LK Timber Industries Sdn Bhd to acquire the freehold industrial land and factory located in Kapar Industrial Park, Klang for future expansion.

IPISB is currently renting the property from LK Timber Industries at RM9,000 a month along with another tenant who is paying RM3,000 a month.

The proposed purchase will save IPISB rentals in addition to providing extra capital allowances due to the savings. “The purchaser (IPISB) will also receive an additional rental income of RM3,000 a month from the other existing tenant of the property,” Mindo added.

The book value of the property based on LK Timber Industries’ latest audited financial statement as of Oct 31, 2009 is RM1.69 million.

This transaction is deemed a related party transaction by virtue of familial ties. Datuk Loo Keng An @ Lee Kim An, who is the managing director of Minho and also a director of IPISB, is the brother-in-law of Tan Ah Tin, a director and substantial shareholder of LK Timber Industries.