Tek Seng Holdings Bhd aims to develop commercial properties including shop lots and light industries in Seberang Perai Tengah, Penang and expand its manufacturing business.
It plans to develop the properties on industrial land that will be jointly acquired by its wholly-owned subsidiary, Wangsaga Industries Sdn Bhd and Tek Seng Properties & Development Sdn Bhd.
In a filing with Bursa Malaysia, Tek Seng said that the two firms had on January 14, 2021, entered into a conditional sale and purchase agreement with Limsa Ekuiti Sdn Bhd, a unit of Main Market-listed See Hup Consolidated Bhd to acquire nine adjoining parcels of industrial land and building for RM46.962 million.
The land is situated along Jalan Bukit Minyak/Permatang Tinggi, the main trunk road - Federal Route 1, and about 5km to the north-west of the Simpang Ampat town centre.
Tek Seng said the transaction is in line with the group's long term strategy to expand and grow its manufacturing business.
Apart from shop lots and light industries, it plans to also build a manufacturing factory and warehouse.
Tek Seng did not disclose the estimated gross development value for the proposed development of the commercial properties, or whether, its property arm, Tek Seng Properties will take on the project.
The group said that barring unforeseen circumstances, the transaction is expected to be completed by the second quarter of this year.
In a separate filing, See Hup said that in undertaking the proposed disposal, the Board had considered that the market value of the property has appreciated over the years.
It said that it also forms part of the plan of See Hup and its subsidiaries to monetise its investment in the property assets.
"As such, the Group is able to realise a significant gain in the value of the property and strengthen its liquidity and cash flow position through the proposed disposal," See Hup said.
See Hup said the proposed disposal represents an opportunity for the Group to immediately unlock the value and monetise its investment on the property with an estimated net pro forma gain on disposal of about RM28.05 million.