NAIM Holdings Bhd’s wholly owned unit Petrochemical Hub Sdn Bhd will be selling two parcels of empty land measuring 405.6ha in Bintulu to the Sarawak Economic Development Corp (SEDC) for RM340 mil.
The sale, said Naim in a bourse filing today, was to allow the group to unlock the value of the assets and proposed a dividend to its shareholders.
The land parcels are located at the Kidurong Industrial area off Jalan Sabekas at Tanjong Kidurong, Bintulu. The lands have a 99-year tenure each expiring in November 2112, said Naim, which specialises in construction and property development.
The disposal consideration of RM340 mil, which shall be satisfied in cash, represents a discount of RM60 mil or approximately 15% over the market value of RM400 mil based on independent valuer CH Williams Talhar Wong & Yeo’s report prepared for sale purposes dated Nov 19, 2018, the company said.
“The total disposal consideration of RM340 mil is fair and reasonable in view of limited market for such a sizable land, taking into consideration the location and market value of the subject lands. Even at about 15% discount from the market value of the subject lands, with an estimated disposal gain of RM115.81 mil, it still represents a reasonable net return of 7% per annum to the group’s investment in the subject lands.
“While there were other potential purchasers that were interested to acquire part of the subject lands, the disposal of the subject lands to SEDC, a state agency, would enable the state to spearhead the development of petrochemical hub in the region and consequently, would spur and enhance the state’s economy as well as create job opportunities to the people,” Naim said.
Naim said disposal will also provide working capital for the existing and future operations of the group particularly in its plan to develop some 2,500 affordable and intelligent homes in the next five years. Proceeds from the disposal will also be used to pare the group’s borrowings.
Part of the proceeds from the disposal will enable the company to make a dividend payment as a reward to shareholders, according to Naim.
“As the proposed disposal is expected to be completed in the third quarter of 2020 with a net estimated pro-forma gain of RM115.81 mil, the proposed disposal is expected to contribute positively to the earnings of Naim Group (in the) financial year ending Dec 31, 2020,” Naim said.
Naim’s shares hovered at 98 sen or 1.56% at 4.09pm, valuing the construction company at RM500.95 mil. – July 17, 2020
