Nusvista yesterday signed a sale and purchase agreement with Gadang Construction Sdn Bhd, according to the construction and property firm.
It said the land measures 10,779 sq m, equivalent to 2.66 acres or 116,024.19 sq ft. At a price tag of RM55.69 million, this means that Gadang Construction is buying the land at RM479.99 per sq ft.
With interest in earthworks, building and civil engineering contractor activities, Gadang Construction is a wholly-owned subsidiary of Gadang Holdings Bhd, which is listed on the Main Market of Bursa Malaysia.
In a filing with the local bourse yesterday, Gabungan AQRS said the move to sell the land is part of its ongoing monetisation programme to raise funds.
Gabungan AQRS said the proceeds from the sale of the land may be used to repay bank borrowings, which is part of its de-gearing exercise to strengthen its financial footing. It also said the proceeds may be used as working capital to fund its construction works.
The transaction is expected to be completed by the third quarter ending Sept 30, 2017 (3QFY2017).
Gabungan AQRS acquired the 99-year leasehold land in November 2009, at a cost of investment of RM38.29 million. The leasehold period will expire in another 91 years on May 13, 2108.
As at Dec 31, 2016, the land had a net book value of RM38.58 million. Gabungan AQRS expects the sale of the land to yield a gain of RM11.66 million, net of tax.
“The proposed sale of land is expected to have a positive impact on the earnings and earnings per share of the company for FY2017,” it said, adding that the sale of the land will reduce its gearing level as well.
This article first appeared in The Edge Financial Daily, on Feb 7, 2017.