PETALING JAYA: Tek Seng Holdings Bhd has proposed to acquire a parcel of industrial land formed by nine adjoining lots and warehouse and structure, measuring 853,863 sq ft, in Seberang Perai, Penang, for a total cash consideration of RM46.96mil from See Hup Consolidated Bhd.
In its filing with the stock exchange, the polyvinyl chloride (PVC) product manufacturer said the transaction was in line with the group’s long-term strategy to expand and grow its manufacturing business.
“The property is in the vicinity of the existing plant of the company and its strategic location allows better utilisation of management and resources.
“A manufacturing factory and warehouse will be built in due course, ” Tek Seng said.
“Apart from the proposed factory, the prospects of the property also enable the future developments of commercial units including commercial shop lots and light industries, ” it added.
Tek Seng said Wangsaga Industries Sdn Bhd (WISB), its wholly-owned subsidiary, and Tek Seng Properties & Development Sdn Bhd, collectively, the purchasers, had entered into a conditional sale and purchase agreement with Limsa Ekuiti Sdn Bhd, a wholly-owned subsidiary of See Hup, for the proposed property acquisition.
The transaction was expected to be completed by the second quarter of this year.
Meanwhile, See Hup said the estimated net pro forma gain for the group from the land disposal was RM28.05mil.
“The proposed disposal represents an opportunity for the group to immediately unlock the value and monetise its investment on the property, ” See Hup said.
It added that proceeds from the proposed disposal of property would to partially repay its bank borrowings and lower its gearing level.
The transaction would also enable the group to reinvest the proceeds for its operations and expansion of its core businesses as and when such opportunities arise.