En­corp to sell Pe­nang land to Se­lan­gor Dredg­ing unit

The Sun (Malaysia) - - SUNBIZ -

PETALING JAYA: En­corp Bhd pro­poses to dis­pose of a plot of free­hold land in Batu Fer­inggi, Pe­nang, to Cres­cent Con­sor­tium Sdn Bhd for RM25 mil­lion cash.

In a filing with Bursa Malaysia yes­ter­day, En­corp said it has en­tered into a sale and pur­chase agree­ment (SPA) with Cres­cent Con­sor­tium, a unit un­der Se­lan­gor Dredg­ing Bhd.

“The pro­posed dis­posal en­ables En­corp to un­lock its cap­i­tal from be­ing tied up in long-term as­sets and to trans­late it into cash re­sources for work­ing cap­i­tal pur­pose and also to im­prove the cash flow po­si­tion of the group,” it said.

The land mea­sures 5.83 acres and is cur­rently va­cant. The pro­posed us­age of the land is for res­i­den­tial de­vel­op­ment.

Based on the au­dited con­sol­i­dated fi­nan­cial state­ments of En­corp as at Dec 31, 2015, the net book value of the land is RM16.12 mil­lion, while the re­lated de­vel­op­ment ex­pen­di­ture is RM6.65 mil­lion.

Its mar­ket value as ap­praised by C H Wil­liams Tal­har & Wong Sdn Bhd on Aug 10, 2016 is RM20 mil­lion.

The orig­i­nal cost of in­vest­ment on the land was RM16.12 mil­lion.

En­corp said the RM25 mil­lion dis­posal con­sid­er­a­tion is above the net book value of the land and its re­lated de­vel­op­ment ex­pen­di­ture, with an es­ti­mated gain on dis­posal of RM2.24 mil­lion or 0.8 sen per share.

Af­ter the pro­posed dis­posal, net debt will be re­duced to RM233.09 mil­lion from RM258.09 mil­lion as at Dec 31, 2015 while the gear­ing ra­tio will be re­duced to 0.36 from 0.39 as at end-2015.

En­corp ex­pects to com­plete the pro­posed dis­posal in the first quar­ter of 2017.

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