JAKS sells 5.9ha to Sunway unit for RM167.6m

KUALA LUMPUR: JAKS Resources Bhd is selling four parcels of land to a unit of Sunway Bhd for a total cash amount of RM167.59 million.

In a filing to Bursa Malaysia yesterday, JAKS said its whollyowned unit, Premier Place Property Sdn Bhd, signed a sale and purchase agreement with Sunway Supply Chain Enterprise Sdn Bhd, on July 31 to dispose of four parcels of freehold land totalling 5.9ha in Selangor.

JAKS said it expected to realise an estimated net gain of RM97.1 million in relation to the sale, after taking into consideration the land and incidental costs.

“Proceeds from the disposal will be utilised largely for repayment of bank borrowings and for working capital needs.”

The repayment of bank borrowings was expected to result in positive interest savings of about RM4 million to RM6 million per annum going forward, it added.

The sale is subject to the approval of JAKS shareholders and the transaction is expected to be completed by the first quarter of next year.

Chief executive officer Andy Ang Lam Poah said following a strategic review of the company’s business portfolio, it had determined to unlock value from selected non-core and underutilised assets, including the USJ 1 land.

He said the firm would also focus on developing its core construction division and core power division, key revenue contributors to the business portfolio.

“The proposed transaction will allow us to redeploy capital into reducing our debt, support working capital needs and for possible future investment opportunities.

“Overall, we believe the transaction supports our efforts to strengthen the balance sheet and deliver better returns on our assets.”