Manhattan Resources subsidiary plans to sell Indonesian land for 271.3 billion rupiah

A POWER plant operator owned by coal shipper Manhattan Resources L02 : L02 0% is selling 2 plots of land in East Kalimantan for close to 271.3 billion rupiah in an interested person transaction, the board disclosed after a conditional land sale and purchase agreement on Thursday (Dec 9).

Mainboard-listed Manhattan Resources' 86.1 per cent-owned Kariangau Power subsidiary plans to sell the land, which has a combined size of more than 271,270 square metres, to a company linked to controlling shareholder Low Tuck Kwong and his family.

The sale is expected to yield a gain of nearly S$19.5 million, and the proceeds will be used for capital expenditure, development cost and working capital for the pipeline projects in the company's renewable energy business, the board said.

The land had previously been reserved for the expansion of the company's power generation business. But the board said that the deal would let Manhattan Resources realise its property investment, since the land is vacant and not generating any income, with rental income likely to remain "restricted or limited in the foreseeable future" amid the Covid-19 pandemic.

The net book value of the land was S$6.51 million as at Dec 31, 2020, and no net profit or loss was attributable to it.

On a pro forma basis, the board said that earnings per share would have jumped from 0.35 Singapore cent to 1.05 cent had the sale gone through on Jan 1, 2020.

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The company's pro forma net tangible assets (NTA) would have risen from 2.81 cents a share to 3.37 cents if the sale were completed on Dec 31, 2020, it added.

The buyer, Dermaga Perkasapratama, is 87.4 per cent owned by Bayan Resources, whose shareholders include Low, as well as his son Low Yi Ngo, who is chief executive and managing director of Manhattan Resources.

Meanwhile, the value of the sale represents 30.61 per cent of the group's latest audited NTA, while the net asset value of the land is 27.5 per cent of the group's net asset value.

The transaction will require the approval of independent shareholders at an extraordinary general meeting. Manhattan Resources is gearing up to name an independent financial adviser, and the audit committee will consider whether the deal is on normal commercial terms and not prejudicial to the interests of the company and its minority shareholders.

Watch-listed Manhattan Resources last closed at S$0.06, with no shares traded on Thursday.