RESINTECH Bhd, a Main Market-listed leading player in plastics pipes, water tanks and fittings manufacturing, has unveiled two significant agreements that will strengthen the group’s financial performance and further its strategic expansion into property development.
Its wholly-owned subsidiary Johan Panglima (M) Sdn Bhd has sealed a share subscription agreement with CNH Group Sdn Bhd as well as a tenancy agreement with Concepts ATC Sdn Bhd which marks a milestone in Resintech’s growth trajectory.
Upon completion of the share subscription process, Resintech’s shareholding in Johan Panglima will dilute to 55% while CNH Group will hold the remaining 45%.
This capital injection will be utilised to jointly developed a 11.4-acre (4.6-hectare) piece of land in Telok Panglima Garang, Selangor into a mixed development project.
Expected to commence in May 2025, the project which has an estimated development cost of RM22.6 mil and a gross development value (GDV) of RM34.1 mil will comprise 158 units of worker hostels, four retail units, a canteen and various other facilities. The construction is slated for completion within 24 months.
“This partnership with CNH Group is a strategic step forward for Resintech as we continue to diversify our business portfolio,” commented the group’s managing director Datuk Dr Teh Kim Poo.
“With CNH Group bringing invaluable expertise in property development, we aim to unlock the full potential of the land acquired by Johan Panglima in 2021.”
Concurrently, Johan Panglima has entered into a tenancy agreement with Concepts ATC, a company specialising in the supply of labour and worker accommodations to iron out the tenancy of three blocks of buildings, including the 158 hostel units and four retail shops.
These facilities will serve as worker accommodations and commercial outlets with Concepts ATC assuming tenancy upon completion of the project.
The tenancy comes with an initial rental rate of RM255,150 per month for the first three months prior to increasing to RM348,300 by the third year. The total rental over the 36-month period is estimated at RM12.09 mil.
There is also a provision for a further three-year renewal subject to a mutually agreed rental increment of no more than 10%.
“The tenancy agreement with Concepts ATC is a critical component of the project’s success,” contended Teh. “By securing a long-term tenant even before construction begins, we are ensuring that Johan Panglima will have a reliable and steady stream of income immediately upon project completion.”
He added: ‘The rental income will cover the operational costs and strengthen our financial stability in the long term.”
At the close of today’s (Sept 9) trading, Resintech was down 0.5 sen or 0.85% to 58 sen with 63,700 shares traded, thus valuing the company at RM114 mil. – Sept 9, 2024
