PETALING JAYA: Gadang Holdings Bhd
's wholly owned subsidiary, Crimson Villa Sdn Bhd, is selling a freehold land in Semenyih, Selangor, to Trans Loyal Development Sdn Bhd for RM2.5mil cash.
In a filing with Bursa Malaysia, Gadang noted the 3.4 hectare land forms part of the Taman Akasia development in Semenyih and carries the obligation to undertake a Rumah Selangorku component imposed by the State Government.
The land comes with an original development approval for 605 units of 1,000 sf per unit of Rumah SelangorKu apartments. The proposed disposal is subject to the buyer obtaining an amended development order to increase the density of the development to not less than 1,000 units, Gadang noted.
The land sale could see Gadang incur a total loss of RM27.7mil. Gadang added when the 62.84 acres of land was acquired in 2015, which includes the 3.4 hectares, for RM95.8mil, the Rumah SelangorKu component was deemed viable when considered into the whole total development plan.
Time and various issues such as price caps, financial costs etc would however now drain the resources of Gadang group.
"The proposed disposal will conserve cash flow and allow the Group to focus on the other phases of this project which are deemed more commercially viable and marketable," Gadang’s filing noted.
If the sale does not materialise, Gadang would have to provide an additional financing of RM80mil. Gadang added the disposal proceeds will be utilised for working capital.
