KUALA LUMPUR: MMAG HOLDINGS BHD has agreed to purchase two parcels of contiguous industrial land in Sungai Bakap, Penang from Dynaciate Group Bhd for RM41mil to expand its logistics business.
The company, which owns Line Clear Express & Logistics Sdn Bhd, told the stock exchange today that it will develop a regional hub and warehouse on the 5.1 hectares site.
"Currently, there are buildings erected on the land. MMAG intends to refurbish the buildings into a regional hub-cum-warehouse to cater for the group’s logistics business," it said.
The new warehouse, MMAG said, will increase Line Clear's warehouse and storage land area from current 726,097 sqf to up to 1,276,022 sqf.
"In view of the size of the property, the group may refurbish the buildings in stages and thereby gradually occupy the buildings as and when they are fit for operations," it said.
Currently, the group has a warehouse-cum-office in Subang Jaya, as well as 45 branches and depots throughout Malaysia.
In a separate filing with Bursa Malaysia today, Dynaciate said proceeds from the disposal will be used as working capital and future acquisitions.
Prior to the disposal, Dynaciate had closed down its steel manufacturing operations at the site to make way for a proposed industrial park project.
The group. however, decided not to pursue the redevelopment project in view of the weaker property market condition.
"The board is of the view that the proposed disposal represents an opportunity for the group to unlock and realise the value of the property," it said.
"The proceeds from the proposed disposal can be used by the group to fund its construction segment which still requires substantial funding to complete its ongoing and future projects for various construction works," it added.
Dynaciate was previously known as Tatt Giap Group Bhd.