“Crescendo has sold over 150 acres for data centre development, generating more than RM790 million in cash proceeds.”
Johor, 12th June 2024 – Crescendo Corp Bhd (KL) has announced another land sale to a data centre company, this time selling a parcel in Pulai for RM115.88 million in cash.
Crescendo’s wholly-owned subsidiary, Panoramic Industrial Development Sdn Bhd (PID), has signed a conditional sale and purchase agreement with Singapore-based data centre company Digital Halo Pte Ltd for the land. The tract spans approximately 20.463 acres, according to a stock exchange filing.
This latest transaction is the sixth land sale by Crescendo in seven months.
Overall, Crescendo has sold over 150 acres of land for data centre development, generating over RM790 million in cash proceeds.
As of the end of January this year, the group had cash and bank balances of RM54.9 million, with short-term loans amounting to RM81.61 million and long-term loans totaling RM267.26 million.
The selling spree appears to have fueled the surge in Crescendo’s share price, which has risen by over 56% year-to-date.
Crescendo mentioned in the filing that the disposal price of RM115.88 million, or RM130 per square foot (psf), was negotiated on a “willing-buyer, willing-seller” basis. This consideration took into account PID’s recent sales in nearby areas to other data centre operators, including Microsoft Payments (Malaysia) Sdn Bhd.
The estimated net profit from the planned sale, anticipated to be finalized in the second half of this year, is RM71.21 million. This transaction requires approval from Crescendo’s shareholders and the Johor State Authority.
“The vacant industrial land is not currently utilized for Crescendo’s or its subsidiaries’ business operations and is therefore not generating any cash flow for the group,” the company stated.
“Moving forward, the group plans to concentrate its resources on six ongoing development projects. If opportunities arise, they will consider land banking and joint ventures in strategic locations. This approach will provide flexibility and liquidity for investment opportunities or projects with significant capital expenditure while bolstering the group’s working capital,” the company added.
Of the net cash proceeds amounting to RM113.77 million, RM69.68 million is earmarked for working capital, RM40 million for ongoing development projects, primarily the Desa Cemerlang project, and RM4.09 million for estimated expenses related to the proposed sale.
Shares of Crescendo rose five sen or 1.32% to close at RM3.84 on Tuesday, giving it a market value of RM1.08 billion.
