KUALA LUMPUR (Aug 11): Global Oriental Bhd is disposing of a 19.24-acre parcel of leasehold land in Seri Kembangan, Selangor for RM43.3 million cash.

In a filing with Bursa Malaysia, Global Oriental said its wholly-owned subsidiary Pertanian Taman Equine Sdn Bhd has today signed a conditional sale and purchase agreement (SPA) with Kemaris Residences Sdn Bhd for the proposed disposal.

The directors of Kemaris Residences, a property development company, are Lee Chin Yong and Lee Pin Po.

Global Oriental said the land was acquired in 1994 at a cost of RM8,336. The carrying value of the land and its related development expenditure as at March 31, 2015 was RM15.27 million, while the market value was RM42 million based on valuation performed by independent valuer CH Williams Talhar & Wong Sdn Bhd.

"The proposed disposal is expected to give rise to a net gain of RM15.92 million for the financial year ending March 31, 2017," it added.

The group plans to use the proceeds from the disposal to repay bank borrowings and for working capital for property development activities.

"The proposed disposal will (also) improve the group’s cashflow through realisation of a portion of the group’s investment in development land into cash.

Global Oriental (fundamental: 0.8; valuation: 1.5) expects to complete the proposed disposal by April 2016.

Global Oriental shares gained 1.5 sen or 3.19% to close at 48.5 sen today, giving it a market capitalisation of RM213.7 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.)