KUALA LUMPUR (Feb 20): Tadmax Resources Bhd is selling a wholly-owned property-based subsidiary to government entity 1Malaysia Development Bhd for RM317.33 million cash.

In a statement to the exchange today, Tadmax said it was selling Tadmax Power Sdn Bhd which owns an estimated 124ha (310 acre) leasehold land in Pulau Indah within Selangor's Klang district.

"The proposed disposal is intended to improve the financial position of the company and its operating subsidiaries (Tadmax group or group).

"The board is of the view that as part of ongoing efforts to rebuild the group, the proposed disposal shall allow Tadmax to meet its objective to attain a stronger financial position and working capital requirements moving forward,"  Tadmax said.

Under the deal, Tadmax said it had signed a share-sale agreement with 1Malaysia Development's unit Ivory Merge Sdn Bhd. According to Tadmax which also undertakes timber operations, it plans to use the sale proceeds to repay its loans and finance its working capital needs.

The exercise is due for completion by the third quarter of 2015.

Trading of Tadmax shares was suspended since 2.30pm today ahead of the land sale announcement. Trading resumes at 9am tomorrow.

Prior to the suspension, Tadmax shares had risen as much as 11.5 sen or 22% to settle at 64 sen at 12.30pm. The stock which traded among the bourse's most-actives saw some 35 million shares done.