KUALA LUMPUR: Hap Seng Consolidated Bhd, through subsidiary Hap Seng Commercial Development Sdn Bhd, is selling 10 acres in Tawau, Sabah for RM175.28 million to Hong Kong-based Lei Shing Hong Ltd (LSH).
LSH is 50.10 per cent-owned by Tan Sri Lau Cho Kun, who is Hap Seng’s largest shareholder.
LSH has a 13.08 per cent stake in Hap Seng.
Hap Seng said it will be paid in cash by LSH within one month of the date sales and purchase agreement.
“The proposed disposal is expected to give rise to a net gain of about RM111.99 million to the group,” it said in a Bursa Malaysia today.
As at December 31, 2016, the net book value of the land was RM27.89 million, including deferred development expenditure.
Based on its audited consolidated financial statements for the year ended December 31, 2016,Hap Seng said its earnings per share would have increased by about 4.74 sen per share.
Hap Seng said the proceeds will be used to reduce its borrowings and for working capital.
“The proposed disposal enables the vendor to realise an attractive gain and the proceeds will be used to reduce bank borrowings and/or to contribute to the working capital of the group,” it said.
Hap Seng noted that the disposal consideration is based on the selling price of about RM400 per square foot and it was arrived at on a willing-buyer and willing-seller basis after taking into consideration VPC Alliance (Sabah) Sdn Bhd’s valuation of the lands.