PETALING JAYA: Glove maker Kossan Rubber Industries Bhd has proposed to acquire a piece of property in Klang, Selangor, for a cash consideration of RM40mil from palm oil machinery group CB Industrial Product Holding Bhd (CBIP).
Both companies announced to Bursa Malaysia yesterday that their wholly owned subsidiaries – Ideal Quality Sdn Bhd (IQ) and Advance Boilers Sdn Bhd (ABSB) – had entered into a sale and purchase agreement.
IQ would acquire a piece of freehold land, measuring approximately 4.05ha, together with several buildings erected thereon from ABSB.
The buildings comprised two single-storey detached factories; a three-storey office building; a single-storey canteen building; and a guardhouse and surau building.
Kossan noted the property adjoined IQ’s existing production facilities and the acquisition would enable IQ to expand its facilities without delay, as all utilities such as water, electricity and natural gas supplies were available.
The proposed acquisition would be funded by internally generated funds and/or bank borrowings. It was expected to be completed on or before the fourth quarter of 2020.
Meanwhile, CBIP said it was expected to make a gain of RM6.94mil from the proposed disposal of property to Kossan.
“The disposal of property is part of the company’s asset-rationalisation exercise to unlock and realise the value of its non-core assets, ” CBIP said.
“It is also an opportunity for the group to reorganise its business portfolio and focus on its core business, which is palm oil mill equipment and engineering works, ” it added.
CBIP said ABSB’s operation would be consolidated with the group’s existing integrated palm oil equipment and engineering facilities at Telok Panglima Garang, Selangor.
It said the proposed disposal of property would enable the group to raise funds for its working capital requirements.
Kossan’s shares rose RM1.05 to close at RM10.38 yesterday, while CBIP’s shares were unchanged at 91 sen.