Friday 29 Mar 2024
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KUALA LUMPUR (Dec 9): EG Industries Bhd is disposing of six parcels of unexpired leases of industrial land, measuring approximately 6.28ha in Bandar Kuala Ketil in Kedah, for RM9 million, to focus its resources on its core electronic manufacturing services (EMS) business.

EG Industries said it entered into a sale and purchase agreement (SPAs) with calcium-based chemical product manufacturer and trader Schaefer Kalk (Malaysia) Sdn Bhd, as part of its restructuring exercise to dispose of non-core assets.

“The land disposals would also enable EG Industries to strengthen its balance sheet and improve its gearing. The gross proceeds of RM8.5 million arising from the disposals would be utilised mainly for repayment of bank borrowings, with estimated interest savings of RM425,000 at an annual interest rate of 5%,” it said.

The disposals are expected to realise an estimated gain of RM1.6 million, which translates into a gain of approximately 77 sen per share for the financial year ended June 30, 2016 (FY16), said EG Industries in a filing today.

The group's net assets per share is expected to reach 0.97 sen, while net gearing ratio is expected to be 0.73 times after the disposals, it said.

Four of the lots are vacant industrial land, while two are industrial premises comprising two single-storey detached factories or warehouses, annexed with one double-storey office building and other ancillary facilities.

Barring any unforeseen circumstances, the SPAs are expected to be completed by end May or June 2016.

EG Industries' shares closed 2.5 sen or 2.54% higher at RM1.01 today, for a market capitalisation of RM208.1 million.
 
(Note: The Edge Research's fundamental score reflects a company’s profitability and balance sheet strength, calculated based on historical numbers. The valuation score determines if a stock is attractively valued or not, also based on historical numbers. A score of 3 suggests strong fundamentals and attractive valuations.)

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