KUALA LUMPUR: Affin Research has maintained its Trading Buy on Benalec with a target price of RM1.98 based on a positive outcome in the signing of a definitive Sale and Purchase Agreement with 1MY Strategic Oil Terminal, and commencement of land reclamation works for the Tanjung Piai and Pengerang concessions in Johor.
In a note on Friday, Affin said based on the estimated reclamation cost of RM157.2mil, the proposed disposal is expected to result in an after-tax gain of RM58.5mil, which is equivalent to RM0.07 per share and which will be booked in FY15 and 9MFY16.
“This proposed land disposal follows the proposed disposal last week of the four pieces of land restored to the group measuring a total of 23.0 acres also in Melaka for a total cash consideration of RM48.1mil and a PAT of RM24mil,” it said.
It added reclamation works on the lands will be carried out by Benalec Sdn Bhd and delivered to the purchaser in four stages: 32.6 acres, 31.9 acres, 33.8 acres and 30.3 acres.
The purchaser has paid RM23.5mil upon signing of the SPA and the balance of the consideration amounting to RM211.6mil are payable in four stages within 90 days from the date of the purchaser’s solicitors receiving the notification of issuance of land titles.
“The balance payable under each stage is as follows: RM53.7mil, RM52.4mil, RM55.6mil and RM49.9mil. Barring unforeseen circumstances, the proposed land disposal is expected to be completed by the end of 1Q2016, i.e. 3QFY16 of Benalec Holdings,” it said.