Naim to sell Bintulu land for RM340mil


  • Corporate News
  • Saturday, 18 Jul 2020

In a filing with Bursa Malaysia, the company said the land located at the Kidurong industrial area comprises two adjoining parcels of land between Bintulu Onshore Receiving Facility, South China Sea, along the road leading to Kem PLKN Similajau and the Petronas Gas Pipeline.

KUALA LUMPUR: Naim Holdings Bhd’s wholly-owned subsidiary, Petrochemical Hub Sdn Bhd has entered into a sale and purchase agreement (SPA) with Sarawak Economic Development Corp (SEDC) for the proposed disposal of two parcels of vacant land totalling 405.6 hectares in Bintulu for RM340mil.

In a filing with Bursa Malaysia, the company said the land located at the Kidurong industrial area comprises two adjoining parcels of land between Bintulu Onshore Receiving Facility, South China Sea, along the road leading to Kem PLKN Similajau and the Petronas Gas Pipeline.

The disposal of the land to SEDC, a state agency, would enable the state to spearhead the development of a petrochemical hub in the region and consequently, would spur and enhance the state’s economy as well as create job opportunities to the people, said the company.

“The group did explore the alternative option of developing the land. Although the alternative option may make a better return, the offer from the purchaser would enable the group to unlock the immediate value of its investment in the land.

“The total disposal consideration of RM340mil is fair and reasonable in view of the limited market for such a sizeable land, taking into consideration the location and market value of the subject land, ” it said.

Even at about 15% discount from the market value of the subject land, with an estimated disposal gain of RM115.81mil, it still represents a reasonable net return of 7% per annum to the group’s investment.

“The proposed sale could also provide working capital for the existing and future operations of the group particularly in its plan to develop some 2,500 affordable and intelligent homes in the next five years as part of its 25 years’ plan of providing one million houses to communities.

“At the same time, to pare down some of the group’s borrowings, thereby improving the group’s financial position, ” the company said.

It said part of the proceeds from the proposed disposal will enable the company to make a dividend payment as a reward to the shareholders.

The company said that as the proposed disposal is expected to be completed in the third quarter of 2020 with a net estimated pro-forma gain of RM115.81mil, the proposed sale is expected to contribute positively to the earnings of Naim group’s financial year ending Dec 31,2020.

“The proposed disposal will not have any effect on the substantial shareholders’ shareholdings in the company as the proposed disposal does not involve any issuance of new ordinary shares in Naim, ” it added. — Bernama

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