PETALING JAYA: Ge-Shen Corp Bhd
has entered into a binding term sheet with Plastico Sdn Bhd for the proposed disposal of five properties in Taman Gembira, Johor Baru, for an aggregate cash consideration of RM35mil.
In a filing with Bursa Malaysia, Ge-Shen said the properties, which are located on freehold land, comprise offices, warehouses and factories.
“The board is of the opinion that the disposal is in the best interest of Ge-Shen and its subsidiaries in view that the proceeds raised will be utilised to repay the bank borrowings and finance the group’s working capital.
“The utilisation of the said proceeds is expected to contribute positively to the future cash flow of the group when it materialises and the repayment of the bank borrowings will enable Ge-Shen to lower down its gearing ratio.
The company added that the exercise will allow Ge-Shen to streamline its operations by improving efficiency and optimise the utilisation of the assets owned by the group
Ge-Shen's chief executive officer, Dr. Adrian Foong Hong Nian, said that the strategic disposal was part of the company's ongoing efforts to optimise its asset base and focus on its core competencies.
“By divesting non-core assets, we are improving our financial flexibility, reducing debt, and positioning Ge-Shen for sustainable growth. This move will also allow us to streamline operations and consolidate our manufacturing facilities, enhancing efficiency and resource allocation.
“The proceeds from this transaction will enable us to reinvest in high-value areas that drive innovation and efficiency, further solidifying our market position,” he said in a separate statement.
