Sapura Industrial Berhad plans to dispose of a vacant industrial land parcel in Melaka for RM10.48 million as part of efforts to unlock the value of non-core assets and fund future expansion initiatives.
The company said it had executed a letter of offer with Loongsen Plastics (M) Sdn Bhd for the proposed sale of a 99-year leasehold industrial property located in Ayer Keroh, Melaka.
The 2.163-hectare site, which carries a lease expiring in October 2073, will be sold for RM10.48 million in cash, a price that closely matches its market valuation of RM10.48 million as determined by an independent valuer in April this year.
The disposal price represents a substantial premium to the land’s net book value of RM2.21 million as at January 31, 2025, and exceeds its original acquisition cost of approximately RM3.17 million in 1991.
Loongsen Plastics, established in 1982, is principally involved in the manufacture of polythene bags and operates from the Melaka International Trade Centre (MITC) industrial area in Ayer Keroh.
Sapura Industrial said the property is currently tenanted and generates monthly rental income of RM2,940. The land is not charged to any financial institution.
The proposed transaction remains subject to the execution of a sale and purchase agreement (SPA), as well as approvals from the relevant state authorities. The purchaser is required to place a 10% deposit upon signing the SPA, with the remaining balance payable within 90 days after all conditions precedent have been fulfilled.
The company intends to utilise the proceeds primarily for capital expenditure, including the expansion of production lines for new projects over the next 24 months. Remaining funds may also be used to support future expansion plans, strategic initiatives and working capital requirements.
Sapura Industrial said the land was originally acquired to facilitate an expansion of its Melaka manufacturing operations. However, after holding the asset for more than 25 years, the board believes it is timely to monetise the property, particularly as future expansion plans are increasingly focused on locations closer to the group’s customer base.
“The proposed disposal allows the company to realise the capital appreciation of the property, unlock the value of non-core assets and convert them into liquid funds for more productive operational use,” the company said.
A further announcement will be made once the sale and purchase agreement has been executed.
