Salcon dispose land for RM20 million

KUALA LUMPUR: Salcon Bhd has disposed a 5,998 sq m piece of leasehold land in Section 14, Petaling Jaya -- on which a four-storey building, a single storey warehouse and a guard house are built -- to The Store Corporation Bhd for a total cash consideration of RM20 million.

In a filing with Bursa Malaysia on Friday, June 25, the company said that the property is subject for industrial land use and is approximately 22 years old with the leasehold expiring on August 22, 2070.

The company said that the net book value of the property as of Dec 31, 2009 is RM13.53 million, adding that the consieration fo RM20 million was arrived on a ‘willing-buyer and willing-seller basis’ after taking into consideration the market value, the condition and the location of the property.

The rationale of the disposal is that the property is not seen suitable for Salcon to be used as an office and would realize a gain of RM6.47 million for the company. The disposal is expected to be completed within a three-month period.

Salcon said that about 35% of the disposal's proceeds would be used for repayment of the bank loan, while the remaining 65% would be used for working capital.

It added that the proceeds from the disposal are expected to be fully utilised within nine months.
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