“Harn Len Corp Bhd signs RM55 million land sale in Johor Bahru, gaining a 71.88% premium, and allocates proceeds for capital expenditure and operations.”
Johor, 25th Sept 2024, 01.45pm – Harn Len Corp Bhd, a plantation company, announced on Tuesday that it has signed a sale and purchase agreement (SPA) to sell a piece of land in Johor Bahru for RM55 million.
The SPA was executed between Harn Len’s wholly-owned subsidiary, Midwest Equity Sdn Bhd (MESB), and Starsea Resources Sdn Bhd, according to a filing with the stock exchange.
The company stated that the land, currently serving as a public parking lot, is situated along Jalan Ngee Heng, approximately 100 meters east of the upcoming Rapid Transit System (RTS) Link station, which is currently under construction.
The land, with a net book value of RM16.8 million, will allow the company to record a net gain of approximately RM33.6 million upon completion of the sale.
Harn Len stated that the RM55 million sale price represents a 71.88% premium over the land’s market value of RM32 million, as determined by the valuer.
The company explained that selling this non-core asset allows it to unlock the land’s value, providing additional cash flow for capital expenditures and general working capital.
Harn Len plans to allocate RM29.4 million towards capital expenditures, focusing on its existing and potential business ventures in areas such as plantations, aquaculture, and investment properties.
“The capital expenditure may cover replanting costs, land clearing, and infrastructure upgrades,” the company noted.
Harn Len has also allocated RM20 million from the sale proceeds to support its daily operations.
The land sale is projected to be finalized within six months from the SPA date, with the possibility of a two-month extension to meet the SPA’s conditions.
As of Tuesday’s market close, Harn Len’s shares increased by half a sen, or 1.4%, to 36.5 sen, giving the company a market capitalization of RM213.25 million.
