KUALA LUMPUR: Crossborder Team (M) Sdn Bhd, a wholly owned subsidiary of Magna Prima Bhd (MPB), has entered into a sale and purchase agreement with Muafakat Kekal Sdn Bhd to acquire a piece of leasehold land in Selayang for a purchase consideration of RM16.5 million.

In a filing to Bursa Malaysia on Oct 14, MPB said the proposed land acquisition would be satisfied by the issuance of 8.25 million new ordinary shares of RM1 each in MPB at an issuance price of RM2 per MPB share.

MPB said barring any unforeseen circumstances and subject to receipt of all relevant approvals, the proposed land acquisition is expected to be completed by 1Q2010.

The proposed land acquisition is in line with the corporate strategy of the MPB Group to develop strategically located land in high-density areas, with easy accessibility and significant gross development value, for the development of lifestyle-themed projects within a short turnaround time, it said.

“The group intends to develop the land into a residential gated and guarded community comprising 90 units of 2½-storey terraced homes with an estimated gross development value of RM70 million,” it said.

MPB said the layout plan has been submitted to the authorities on Sept 14.

“Further information in regards to the proposed development is not available as at the date of the announcement as the management of MPB has yet to finalise the details of the proposed development,” it said.

MPB said the submissions to the relevant authorities in respect of the proposed land acquisitions are expected to be made within two months from Oct 14.

The proposed land acquisition is expected to contribute positively to the earnings of the MPB Group for the future financial years.

“However, resulting from the issuance of additional MPB shares pursuant to the proposed land acquisition, there may be dilutive effects on the MPB Group’s earnings per share,” it said.