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Far East unit to sell Malaysian property for RM11.5m

A WHOLLY-OWNED subsidiary of Far East Group has accepted a letter of offer to sell a land parcel together with a factory in Malaysia at RM11.5 million (S$3.80 million) to Ng Hin Kwee & Sons Sdn Bhd.

The announced sale consideration for the offer accepted by Far East Maju Engineering Works Sdn Bhd excludes goods and services tax.

In a Wednesday disclosure for the letter of offer, Far East said that Ng Hin Kwee & Sons has paid up a deposit of RM230,000 for the purchase of the property to Knight Frank Malaysia Sdn Bhd.

Ng Hin Kwee & Sons will pay a further sum of RM920,000 upon execution of the sale and purchase agreement (SPA) and the balance RM10.35 million within three months of the SPA.

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The property occupies gross land area of 4,485 square metres.

Based on an independent valuation commissioned by Far East, the ascribed open market value of the property was RM11.8 million as at March 22.

The carrying amount of the property on Far East's unaudited financial statements for the first half ended June 30 was about S$1.086 million. The group said that the proposed disposal is expected to result in a gain of about S$2.459 million.

"The property has been dormant since December 2016 when the manufacturing operations of the group in Malaysia were moved to China.

"The proposed disposal will realise net cash proceeds of about S$2.459 million after deducting estimated related expenses," Far East Group said.

It added that the net proceeds from the proposed asset disposal will be used as general working capital.