KUALA LUMPUR (March 20): SYF Resources Bhd is mulling the acquisition of seven adjoining pieces of freehold agriculture land in Mukim Rompin, Negeri Sembilan for RM14 million, after it entered into a tenancy agreement with condition to purchase the assets.
In a statement to Bursa Malaysia, SYF (fundamental: 1.3; valuation: 1.8) said its wholly-owned unit Great Platform Sdn Bhd (GPSB) entered into the agreement with Eleplas Industries Sdn Bhd today.
Under the agreement, GPSB will rent seven adjoining pieces of freehold agriculture land measuring approximately 40 acres (16.2ha), together with factories erected thereon, at a monthly rental of RM52,500.
Under the agreement, SYF also has the option to purchase the assets on or before December 31 this year, at the said purchase price.
SYF said the proposed acquisition will be funded through internally-generated funds and external bank borrowings. As such, the gearing ratio of the group will increase accordingly, it added.
SYF said the proposed acquisition is in line with the group’s strategy to seek growth from upstream activities.
“As the land area is substantial, it will cater for expansion of our upstream activities of timber processing, including the manufacture of boards,” said SYF.
It added the location of the land is “strategic” as raw materials can be sourced from the surrounding areas, which have abundant supply of rubber wood logs.
SYF closed up 1.5 sen or 3.2% at 49 sen today, giving it a market capitalisation of RM299.32 million.
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