KUALA LUMPUR: Golden Land Bhd has proposed to undertake a cash distribution totalling RM190.33 million or 88 sen per share to reward its shareholders, via a share capital reduction and repayment, and the proposed distribution of a special cash dividend of 13 sen per share.

This is subject to the completion of a RM655 million disposal of four subsidiaries and a parcel of oil palm plantation land in Beluran, Sabah, to Felda Global Ventures Holdings Bhd’s unit, Pontian United Plantations Bhd.

In a filing with Bursa Malaysia yesterday, Golden Land (fundamental: 0.7; valuation: 2) said the entitlement date of the cash distribution will be determined and announced later.

The proposed capital repayment involves Golden Land undertaking a capital reduction exercise of 75 sen for each Golden Land share, equivalent to RM167.18 million, which will result in a reduction of the par value of Golden Land shares from RM1 to 25 sen each.

The corporate exercise will result in the adjustment to the par value of Golden Land shares, but not to the existing number of shares.

Meanwhile, Golden Land is proposing to declare a special cash dividend of 13 sen for every Golden Land share, which amounts to RM28.12 million. The special dividend will be paid out of the net proceeds to be received by the company from the proposed disposal. 

“Barring any unforeseen circumstances, the proposed distribution is expected to be completed in the first quarter of 2016, after the completion of the proposed disposal of assets,” Golden Land said.

Golden Land had on June 8, 2015 signed a sale and purchase agreement with Pontian United Plantations to dispose of its entire stake in Yapidmas Plantation Sdn Bhd, Sri Kehuma Sdn Bhd, Ladang Kluang Sdn Bhd and Tanah Emas Oil Palm Processing Sdn Bhd, as well as an 836.1ha parcel of land in Beluran for RM655 million cash.

The proposed disposal is expected to generate a one-off gain of RM15.23 million for Golden Land, after taking into consideration the real property gains tax of RM25.96 million and estimated expenses of RM20 million in respect of the proposed disposal. 

The proposed disposal is expected to be completed by the fourth quarter of 2015. Golden Land shares closed nine sen or 5.26% higher at RM1.80 yesterday, with a market capitalisation of RM389.3 million. 

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This article first appeared in The Edge Financial Daily, on July 23, 2015.