KUALA LUMPUR: UEM Sunrise Bhd's subsidiary UEM Land Bhd, plans to exit a joint venture company with KL Kepong Bhd (KLK) which has the rights to develop 1011 hectare (ha) parcels of land in Kulai, Johor for RM386.2 million.
UEM Land will sell its 40 per cent equity stake in Aura Muhibah Sdn Bhd (AMSB) to KLK Land Sdn Bhd (KLKL), a subsidiary of KLK.
The combined value of the 100,000 ordinary shares of RM32.6 million and 353.6 million redeemable preference shares (RPS) make up the total consideration of RM386.2 million
Following the proposed disposal and upon the fulfilment of the share sale agreement (SSA), UEM Land will divest its entire equity interest in Aura Muhibah.
"The disposal is in line with UEM Sunrise turnaround strategic plan to transform the company into a balanced real estate player with the immediate goal of strengthening financial performance through the monetisation of non-strategic lands and assets.
"It provides UEM Sunrise with the opportunity to realise a gain on disposal and unlock the value of one of its longstanding assets.
"Subsequently, this will also allow the company to strategically focus on its other assets in the Southern region, particularly the industrial developments in Gerbang Nusajaya, Iskandar Puteri," it said in a filing with Bursa Malaysia Securities today.
UEM Sunrise said the proceeds from the disposal will be used to repay outstanding debt upon maturity by the year end and pay the tax obligation over the disposal.
The balance will be used to support the company's working capital requirements. Barring any unforeseen circumstances, the company said the disposal is expected to be completed on or before the expiry of the completion period, which is June 29, 2024.