Tebrau Teguh land sale 143% above RM11.6m NBV

KUALA LUMPUR (Jan 12): Tebrau Teguh Bhd is disposing of two parcels of commercial land in Plentong, Johor for RM28.27 million, which is estimated to be RM16.67 million or 143.7% above the net book value (NBV) of RM11.60 million as at Dec 31, 2010.

The company said on Thursday, the RM28.27 million was based on a valuation report by Messrs Raine Horne International Zaki + Partners dated June 17, 2011. "The total net book value as per audited financial statements for the year ended Dec 31, 2010 is RM11.60 million," it said.

On Sept 30, 2011, Tebrau Teguh's unit Bayou Bay Development Sdn Bhd had signed a sale and purchase agreement (SPA) with Delta Bestari Sdn Bhd to dispose of two plots of commercial land of 2.139 acres. On Jan 6, 2012, it had also signed an SPA with Northstar Frontier Sdn Bhd to dispose of  two plots of commercial land with total land area of 8.115 acres.

Tebrau Teguh said the updated market value, based on Raine Horne International Zaki + Partners' valuation, was RM6.05 million for the 2.139 acres and RM20.75 million for the other 8.115 acres. The justification was that the valuer had taken into consideration of the redevelopment potential of the properties. The consideration was higher than the potential return from the development of the 5.674 acres of land based on the discounted cash flow method.

The DCF method was based on the assumption that 62 units of three-storey shop office would be built, expected total profit before tax of RM8.08 million, cash flow period of three years and a discount rate of 8%.