KUCHING: Industrial gas manufactuturer SIG Gases Bhd is selling a property in Selangor for RM11mil cash to partly reduce its bank borrowings.
Wholly-owned subsidiary Southern Industrial Gas Sdn Bhd has entered into a sale and purchase agreement with Reca Developoment (M) Sdn Bhd for disposal of the property where a two-storey office and factory is located. The disposal is expected to be completed in third quarter this year.
The building is currently rented out for RM60,000 per month.The existing tenancy will be assigned to the purchaser.
SIG Gases said the proposed disposal provided an opportunity for the group to realise appreciation in market value of the property which had been rented out to a third party since the group relocated its business operation to a larger premises in Nilai, Negeri Sembilan.
“The expected net gain from the proposal disposal is approximately RM4.22mil for the financial year ending Dec 31, 2015,” the company said in a filing with Bursa Malaysia.
SIG Gases said from the proceeds, RM5.4mil would be used to repay borrowings, RM5.39mil for working capital and the balance of RM210,000 for disposal expenses.
In February, Southern Industrial Gas was granted alienation of a sixty year leasehold land of 12.14ha in Samalaju, Bintulu Division, by the state Land and Survey Department at a premium of about RM2.69mil and annual rent of RM6,070.
SIG Gases was among the early investors in Samalaju Industrial Park, which caters to energy-intensive industries, within Sarawak Corridor of Renewable Energy (SCORE). The group has manufacturing facilities in the park and refilling operations in Bintulu Division and Peninsular Malaysia.
Meanwhile, Warisar Sdn Bhd, a subsidiary of Ibraco Bhd via Ibraco HGS Sdn Bhd, will dispose of two properties in Bintulu Town Square to Ibraco managing director Chew Chiaw Han for about RM2.43mil.
The properties are a three-storey shophouse (for RM2.17mil), which is 75% completed, and one lock-up shop (RM258,000), the construction of which is expected to commence soon
“The properties being two of the resultant lots under Bintulu Town Square which Ibraco is the beneficial owner by virture of a joint-venture agreement between Ibraco HGS, BDA Properties Sdn Bhd and Warisar,” Ibraco told Bursa Malaysia.