Packaging firm to diversify into property development

PETALING JAYA: D’Nonce Technology Bhd, which has accepted the development rights for a parcel of freehold land measuring 6,774 sqm in Bukit Mertajam, Penang, proposes to diversify into construction and property development.

The industrial packaging firm told the stock exchange that its wholly owned subsidiary D’nonce Properties Sdn Bhd had entered into a development rights agreement with Tan Than Kau and Tan Tiang Yang to acquire the rights to develop the land for RM10 million cash.

The purchase sum is to be sourced from a combination of bank borrowing and internally generated fund, which is to be paid over four tranches.

The land had been previously approved by the Seberang Perai Municipal Council (MPSP) via a letter dated April 13, 2016 for the development of a block of 19-storey (281 units) affordable apartment building and a block of seven-storey car park .

However, D’Nonce said it is in the midst of evaluating the viability of the existing building plan and the terms of the original development order approved by MPSP.

The group said the development rights serves as an opportune platform to diversify its earnings base, and the new business activities in property development and construction may contribute to 25% or more of its net profits, or cause a diversion of 25% or more of its net assets moving forward.

D’Nonce also anticipates construction and property development to be a major contributor to the group’s earnings in the future as it will continue to secure more projects in the long-term.

On Bursa Malaysia yesterday, D’Nonce fell 1.51% to 32.5 sen on volume of 928,400 shares.