RUBBERWOOD furniture Sand Nisko Capital Bhd (formerly Len Cheong Holding Bhd) has further strengthened its grip in the property sector with another acquisition of 25.9 acres of land in Melaka for RM5.8 mil to expand its property development business.
This is made possible by the inking of a sale and purchase agreement between its wholly owned subsidiary Len Cheong Resources Sdn Bhd and Cempakaraya Sdn Bhd for the freehold land plot in the Alor Gajah district.
“This is a good opportunity for us to expand our property development business in Melaka through the acquisition of land that is matured and ready for development,” commented Sand Nisko’s managing director Emily Sow Mei Chet.
“Having diversified into the property development, construction and property investment business since last year, this latest acquisition could help propel us forward in the property development business.”
According to Sow, the funding for the acquisition will be done through a combination of internally generated funds and bank borrowings.
The exact mix however will be decided by the management at a later date after taking into consideration of Sand Nisko’s gearing level, interest costs as well as internal cash requirement for the group’s business operations.
More broadly, the acquisition of the land will mark a turnaround for the group which has seen its furniture manufacturing and trading division languished amid the COVID-19 pandemic.
Since last year, the group has diversified away from the furniture manufacturing and trading division into the construction and property development segment.
Recall that Len Cheong Resources had in January this year entered into a joint venture agreement with Goldpeace Corporation Sdn Bhd to jointly develop a parcel of freehold land in Melaka.
The latest acquisition is in line with the group’s efforts to increase its land bank for the purpose of property development, according to Sow.
“Led by a team of professionals with vast experience in the property development business, the acquisition is timely as we approach the tail-end of the pandemic,” she pointed out.
“This latest development would help to escalate the turnaround plans for Sand Nisko and expand its construction and property development business.”
Sand Nisko closed unchanged at 42.5 sen yesterday (April 21) with 855,500 shares traded, thus valuing the company at RM44 mil. – April 22, 2021
