Olympia — via its wholly-owned subsidiary City Land Sdn Bhd — entered into a Sales and Purchase Agreement with Starwatt Engineering Sdn Bhd on Tuesday, Dec 21 for the disposal of land, it said on Tuesday.
Located on a stretch of coastal development land with direct sea frontage to the Straits of Melaka, the parcels are coastal lands that have generally been reclaimed and leveled.
The parcels of land were acquired by Olympia in December 1980 for about RM3.27 million, and are designated for future commercial and residential development. However, due to the depressed property market in Melaka, no developments were made.
According to Olympia, the parcels are presently charged to financial institutions as security for financial obligations of the company under its debt restructuring scheme.
Taking into account the land exclamation cost of about RM24.6 million, Olympia stands to gain RM960,000 from the proposed disposal. The amount will be used to redeem the existing encumbrances of RM33.9 million and the balance will be utilised for the company's working capital.
The proposed disposal is expected to reduce Olympia's gearing position to 0.49 times from 0.53 times.
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