Ideal Capital Bhd’s 70% owned subsidiary Lesari Duta Sdn Bhd and Mujjur Sinnarjaya SdnBhd acquired 17 parcels of freehold land of RM475.359 million.
The purchase price was arrived at on a “willing buyer willing seller” basis after taking into consideration and based on the analysis by the management that the current asking prices of the properties within the vicinity of the Properties are in the region of RM10.00 to RM14.00 per square foot of land area with an average of RM13.18 per square foot.
In a Bursa filing, it said that the purchase consideration will be funded via a combination of bank borrowings and internally generated funds, the proportion of which will be determined at a later date.
It said that the IDEAL is currently applying financing facilities from financial institutions to fund the Purchase Consideration. Alternatively, IDEAL would consider rights issues to fund the purchase.
The rationale of Purchase is that IDEAL is pursuing inorganic growth by expanding its land banks. The lands are situated in Bertam, a strategic location with the existing infrastructure that includes dual carriageway roads that connect the lands to the North-South Expressway thru the Bertam toll. Ultimately, the lands in Bertam would be industrial lands.
Furthermore, the lands are only approximately 30 minutes from the Butterworth Port and 45 minutes from the Penang International Airport, making it feasible to be subdivided and sold for factories to be built.
With the current strong demand for industrial land, Ideal foresees it as a good opportunity to increase its shareholder’s value by purchasing the land and then subdividing it into plots for sale. The profit obtained thru the sales of sub-divided industrial land would increase the shareholders values. Currently, IDEAL holds approximately 36.5 acres of agricultural land.
