BAT sells factory in PJ to LGB Properties for RM218mil


Decision on gain: BAT Malaysia has yet to decide what to do with the proceeds from the disposal of the property.

PETALING JAYA: British American Tobacco (M) Bhd (BAT Malaysia) is selling its landmark cigarette factory in Petaling Jaya for RM218mil to LGB Properties (M) Sdn Bhd as the group winds down its manufacturing business in the country.

The buyer for the site was selected via a public tender exercise.

BAT Malaysia said in a filing with Bursa Malaysia yesterday that it had yet to decide what to do with the proceeds from the disposal, but may use it as dividends to shareholders, undertake capital reduction of BAT Malaysia and/or repay current revolving credit facilities.

BAT Malaysia, in March, announced it is shutting its manufacturing business in stages with the shutdown of its facility in Petaling Jaya expected in the second half of 2017.

“The proposed disposal is in line with the company’s intention to cease Tobacco Importers and Manufacturers Sdn Bhd’s (TIM) factory operations further to its objective to restructure its business operations in Malaysia by sourcing tobacco products for the domestic market from other BAT Group factories regionally,” said BAT Malaysia in the announcement.

TIM is a wholly-owned subsidiary of BAT Malaysia.

BAT will remain as tenant for at least a year, and may extend the tenancy by two further terms of six months each upon expiry of the rental term.

LGB Properties is a subsidiary of LGB Group, which holds substantial stakes in listed companies such as Taliworks Corp Bhd, Amalgated Industrial Steel Bhd and Central Industrial Corp Bhd.

BAT Malaysia said the use of the gross cash proceeds of RM218mil would be reviewed and determined by the board in the best interest of the company by year-end.

The money “may be utilised to declare dividends, undertake capital reduction of BAT Malaysia and/or repay current revolving credit facilities,” the company said.

The market value of the land is RM216.8mil and buildings RM45.7mil.

As such, the total market value of the property is RM262.5mil as appraised by DTZ Nawawi Tie Leung Property Consultants Sdn Bhd on April 22.

Based on the purchase price, the expected net gain to the BAT Malaysia Group arising from the proposed disposal is about RM148.78mil after taking into account the audited net book value of the property of about RM59.21mil, estimated expenses to be incurred for the disposal of RM2.17mil, and real property gain tax of RM7.83mil.

The property was previously acquired by TIM from Rothmans of Pall Mall (M) Bhd (now known as BAT Malaysia) on Nov 25, 1996 for RM62.38mil.

Article type: metered
User Type: anonymous web
User Status:
Campaign ID: 46
Cxense type: free
User access status: 3
Join our Telegram channel to get our Evening Alerts and breaking news highlights
   

Next In Business News

Impiana Hotels secures 5-year contract to manage Petronas leadership centre
Serba Dinamik appoints Nexia as new external auditors
F&N posts higher sales in Q3, but rising costs dent earnings
Political turmoil weighs on Bursa
As China's recovery wobbles, economists expect more policy easing
Thai c.bank holds key rate at record low amid COVID-19 surge
Sony posts Q1 profit jump on pandemic demand for devices and content
LBS Bina records property sales of RM684m as at end-July
Airline industry statistics confirm 2020 as worst year on record
Merchantrade Asia, NPCI offer real-time remittances to India

Stories You'll Enjoy


Vouchers