KUALA LUMPUR (Apr 2): The world’s largest condom manufacturer Karex Bhd said no formal valuation was carried out on the two pieces of land in Pontian, Johor, that it intends to acquire for RM14.8 million.
In a reply to Bursa Malaysia’s query today, Karex said it does not know the net book values of the properties as they were not made known to it. Further, it said it is not privy to the financial statements of the lands’ vendor.
Karex (fundamental: 2.55; valuation: 0.30) said the purchase price was derived from a close gauge of the prevailing market price and enquiries of recent transacted prices in the surrounding vicinity.
“The company inferred that the price for commercial/industrial land ranges from approximately RM52 to RM68 per square foot while agricultural land ranges from RM12 to RM19 per square foot,” it explained.
Hence, it approximated that the first piece of land, which is a commercial/industrial land, is at RM42 per sq ft. The second piece of land, which is slated for agriculture use, was put at RM10 per sq ft.
The lands collectively total some 4.53 ha or 487,545 sq ft.
“In addition, the company also took into account the cost of relocating its existing plant should the Tenancy Agreement not be renewed in October 2015 pending the completion of its new plant targeted in June 2016,” it added.
On March 31 this year, Karex’s wholly owned subsidiary, Karex Industries Sdn Bhd, had entered into two sale and purchase agreements with Tropical Produce Company (Pte) Ltd for the acquisition.
Karex had said then that the acquisition, which will take about three months to complete, will be settled with cash from a private placement exercise that was completed by Karex on March 11, 2015.
Shares of Karex closed 0.68% or 3 sen lower at RM4.36 today, which gives it a market capitalisation of RM1.94 billion.
(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.)