GuocoLand Malaysia's unit to dispose of land in Malacca for RM119.3m

GUOCOLAND Malaysia (GLM) on Friday said its indirect subsidiary has entered into a conditional sale and purchase agreement to dispose of a parcel of freehold agricultural land in Malacca to Parkland Avenue Sdn Bhd (PASB) for some RM119.3 million (S$39.3 million).

PASB is a private limited company incorporated in Malaysia involved in property development and investment holding.

GLM's 68 per cent-owned indirect subsidiary, GLM Emerald Industrial Park (Jasin) Sdn Bhd, had obtained a valuation by C H Williams Talhar & Wong Sdn Bhd on Jan 2, which appraised the property at RM99.4 million.

In a regulatory filing on Friday, the company noted that the proposed disposal will enable the GLM group to realise its investment in the property, and to focus on its core business of property development.

Out of the estimated gross proceeds of RM119.3 million, GLM's subsidiary intends to use RM98.1 million for general working capital requirements, and/or distribution to its shareholders. The rest will be used to defray estimated tax and expenses relating to the proposed disposal, it said.

Upon completion of the deal, GLM group expects to realise an estimated net gain on disposal of about RM35.4 million. As at June 30, 2019, the net book value of the property stands at RM49.2 million.

The proposed disposal of the land, which is currently being used as an oil palm plantation, is subject to the approval of the Estate Land Board.

Barring any unforeseen circumstances, the deal is expected to be completed in the first half this year, the company said.

GuocoLand shares closed flat at S$1.97 on Friday, before the release of this announcement.