KUALA LUMPUR: KUB Malaysia Bhd is selling an oil palm estate in Kinabatangan, Sabah to Tradewinds Plantation Bhd.
Under the deal, Tradewinds will pay RM10mil cash to KUB and settle KUB Malua Plantation Sdn Bhd outstanding loans of RM70.36mil with Bank Islam.
"The Proposed Disposal will enable the Company to dispose an underperforming entity within the Group which is not considered as synergistic and cost efficient to the Group’s oil palm plantation businesses," KUB said in a filing with Bursa Malaysia today.
It added that the proposed disposal will also enable the Group to strengthen its financial position by reducing its overall debt level and interest expenses significantly following the de-consolidation of KUB Malua’s bank borrowings.
"With greater financial flexibility, KUB is able to redeploy its capital and resources for the expansion of its other businesses," it said.
The market value of the KUB Malua estate was estimated at RM100mil, according to an independent registered valuer, Azmi & Co (Sabah) Sdn Bhd.