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KUALA LUMPUR: Lee Swee Kiat Group Bhd (LSK Group) has disposed of its freehold land in Klang for RM4.7 million.
According to its filing to Bursa Malaysia on Nov 12, its wholly-owned sub-subsidiary, Lamifoam Sdn Bhd and Tan Kuin Luan, an alternate director to Lee Ah Bah @ Lee Swee Kiat, had on Nov 12 entered into a conditional sale and purchase agreement with Eng Beng Manufacturing (M) Sdn Bhd to dispose of the 4.7-acre land.
Lee Ah Bah @ Lee Swee Kiat is the chairman of LSK Group.
The land was acquired in January 1997 for RM555,882. The net book value of the land based on the latest audited financial statements as at Dec 31, 2008, is RM852,965.
“The proposed disposal is expected to result in an estimated gain on disposal of approximately RM1.3 million to LSK Group for the financial year ending Dec 31, 2009 (FY2009). Accordingly, the earnings per share of the LSK Group is also expected to improve by approximately 0.77 sen,” it added.
The deal will also result in a net cash inflow of RM2.1 million for the LSK Group. The proceeds from the disposal are scheduled to be utilised for the repayment of bank borrowings (RM2.18 million) and incidental costs to the disposal (RM167,000). The bank borrowings of the group after the repayment would be RM33.79 million. This could potentially save the company RM150,000 in interest expenses per annum.
The disposal is also expected to reduce the gearing of the LSK Group by approximately RM2.2 million based on its audited financial results as at Dec 31, 2008.
