KUALA LUMPUR: Kossan Rubber Industries Bhd has found a new buyer for its 39.04ha vacant land in Kuala Langat, Selangor, which it plans to sell for RM153.38 mil to raise funds for the development of two pieces of industrial land in Perak.
The rubber glove maker said wholly-owned subsidiary Ideal Quality Sdn Bhd yesterday inked a conditional agreement to sell the land to Best Eternity Recycle Technology Sdn Bhd (BERT), a pulp, paper and paperboard maker.
The signing followed the March 16 termination of an earlier conditional sale and purchase agreement (SPA) to sell the freehold land for RM147.75 mil to Liansheng Paper (M) Sdn Bhd. The cancellation was said to be due to the buyer being unable to meet the terms and conditions of the sale.
In a filing with Bursa Malaysia today, Kossan said the group aimed to consolidate/centralise all future business expansion at the 333.5ha leasehold site in Bidor, Perak, with a view towards improving efficiency, reducing operating expenses and achieving synergistic savings.
“The proposed disposal provides an opportunity for Kossan to unlock and realise the value of the (Kuala Langat) land, which is currently not economically utilised, and the funds so raised will be utilised to hasten the development of the Bidor land,” it explained.
Kossan said the offer by BERT appeared to be an attractive one and the acceptance was in line with the company’s objective to enhance shareholder value.
The completion of the agreement is conditional, among others, on BERT obtaining the approvals of the Selangor authorities as well as the Economic Planning Unit (EPU), or a letter from the EPU confirming that its approval is not required for the transaction.
Kossan said the sale was expected to result in a net gain of about RM39 mil.
The proposed deal is expected to be completed by the first quarter of 2021. - April 2, 2020, Bernama