The Edge Property, Photo Credit to The Edge Property
clock 15-08-2017
hit 2,592
Hap Seng to Dispose of Land in Tawau for RM175.28 Million

Hap Seng Consolidated Bhd is disposing of 10.06 acres (4.07ha) of leasehold land in Tawau, Sabah for RM175.28 million to a related party, Hong Kong-based Lei Shing Hong Ltd (LSH) said.

"The proposed disposal enables us to realise an attractive gain, and the proceeds will be used to reduce bank borrowings and/or to contribute to the working capital of Hap Seng" the group said in a filing with Bursa Malaysia yesterday.

The disposal consideration of about RM400 per sq ft was arrived at on a willing-buyer willing-seller basis based on a valuation by independent valuer VPC Alliance (Sabah) Sdn Bhd, Hap Seng said.

The net book value of the land, on which no business activity had been carried out, totalled RM27.89 million as at Dec 31, 2016. The total cost of investment between Jan 31, 1986 and Aug 8, 2017 was RM26.12 million.

The sale, which would give Hap Seng a net gain of RM111.99 million, would increase its earnings per share and net assets per share by 4.74 sen and four sen respectively, for the financial year ended Dec 31, 2016 (FY16).

Meanwhile, the group's gearing for FY16 would fall from 0.62 times to 0.57 times, Hap Seng said.

Both Hap Seng and LSH are related parties via Hap Seng's 60.83% holding company, Gek Poh (Holdings) Sdn Bhd, in which Tan Sri Lau Cho Kun @ Lau Yu Chak is a director with a controlling 56% stake. Lau also has a 50.1% deemed shareholding in LSH.

Hap Seng managing director Datuk Edward Lee Ming Foo is also the managing director of Gek Poh, while executive director Lee Wee Yong is also a director of Gek Poh.

Shares in Hap Seng closed up 13 sen or 1.44% at RM9.18, giving the group a market capitalisation of RM22.86 billion.

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