KUALA LUMPUR: Crescendo Corp Bhd, majority-owned by the founding Gooi family, has generated about RM792 million in cash over seven months through the sale of more than 150 acres of land designated for industrial and data centre construction in Malaysia.
The group recently completed its latest transaction, selling 20.463 acres of land in Pulai, Johor, to Singapore-based data centre firm Digital Halo Pte Ltd for RM115.88 million in cash. Crescendo's wholly owned subsidiary, Panoramic Industrial Development Sdn Bhd (PID), signed a conditional sale and purchase agreement with Digital Halo for this deal, according to a stock exchange filing.
The sale price of RM115.88 million, or RM130 per square foot (psf), was negotiated on a "willing-buyer, willing-seller" basis, considering PID's recent land sales to other data centre operators, including Microsoft Payments (Malaysia) Sdn Bhd.
In November 2023, Microsoft paid RM315.17 million (or RM120 psf) to acquire 2.63 million sq ft of vacant freehold land in Pulai. It also acquired an additional 1.1 million sq ft in Pulai from PID for RM132.47 million, or RM120 psf, in the second quarter of this year.
Separately, it was announced on Monday that Microsoft is acquiring 49.83 hectares of industrial land in Iskandar Malaysia from Eco World Development Group Bhd's wholly owned unit, Eco Business Park 6 Sdn Bhd, for RM402.3 million, equivalent to RM75 psf.
Crescendo said that it expects to gain about RM71.21 million from the land disposal to Digital Halo.
The transaction is pending approval from Crescendo's shareholders and the Johor State Authority and is anticipated to be completed in the second half of this year.
"Similar to the series of land sales in the same vicinity announced by the group over the past year, the proposed disposal will provide an opportunity to realise gains and unlock the value of its investment," it said.
Crescendo noted that the vacant industrial land is not currently used by the group or its subsidiaries, thus generating no cash flow.
The group said that it has allocated the net cash proceeds of RM113.77 million, with RM69.68 million meant for working capital, RM40 million for ongoing development projects (mainly the Desa Cemerlang project), and RM4.09 million for expenses related to the proposed disposal.
Moving forward, Crescendo plans to concentrate on six ongoing development projects and explore land banking and joint ventures in other strategic locations.
"We will have the flexibility and liquidity to pursue investment opportunities or projects requiring large capital expenditures while strengthening our working capital position," it added.
As of the end of January this year, Crescendo reported cash and bank balances of RM54.9 million, with short-term loans amounting to RM81.61 million and long-term loans totaling RM267.26 million.