This article first appeared in The Edge Financial Daily on December 29, 2017

KUALA LUMPUR: Kimlun Corp Bhd’s property arm Kimlun Land Sdn Bhd is buying two pieces of land in Johor from Mah Sing Group Bhd for a combined RM36.08 million to build commercial properties.

Kimlun said the proposed acquisitions provide it an opportunity to increase the size of its land bank in strategic locations in order to enhance its future revenue and earnings.

“As the development potential has yet to be finalised at this preliminary stage, the total development revenue/cost, expected commencement and completion date or expected profits to be derived cannot be readily ascertained. The source of funds to finance the development is likely to come from internal funds and/or bank borrowings,” it said.

In one of two filings with Bursa Malaysia yesterday, Kimlun said its indirect wholly-owned subsidiary Kiiville Sdn Bhd had entered into an agreement with Mah Sing’s wholly-owned unit Mah Sing Properties Sdn Bhd to purchase land measuring 20,836.30 sq m in Pulai from the latter for RM14.25 million cash.

It added that the land, which has an Indian temple on part of it, is located within the Taman Sri Pulai Perdana township, near Pulai Springs Resort.

In a separate filing, Kimlun announced that its indirect wholly-owned subsidiary Kii Ashbury Sdn Bhd had also entered into an agreement with Mah Sing’s wholly-owned unit Meridin East Sdn Bhd to purchase 17.9 acres (7.24ha) of agriculture land in Plentong for RM21.83 million cash.

The land, located within the Meridin East township, has been approved for commercial development.

Kimlun said it will fund the land purchases via internal funds and/or external borrowings, the breakdown of which is not finalised at this juncture.

“The proposed acquisitions are expected to contribute positively to the future earnings and net assets of Kimlun Group,” it added.

Barring unforeseen circumstances, the proposed acquisitions are expected to be completed no later than the end of the fourth quarter of 2020.

Kimlun shares closed unchanged at RM2.30 yesterday, bringing a market capitalisation of RM734 million. Mah Sing shares, meanwhile, settled at RM1.47, up one sen or 0.69% yesterday, valuing it at RM3.54 billion.