KUALA LUMPUR (April 18): Karyon Industries Bhd plans to dispose of a 0.2ha piece of leasehold land in Sungai Buloh, Selangor, for RM5.6 million.

In a filing with Bursa Malaysia today, Karyon said its wholly-owned subsidiary Karyon (Malaysia) Sdn Bhd (KMSB) is selling the plot to Scanwolf Plastic Industries Sdn Bhd, a wholly-owned unit of Scanwolf Corp Bhd.

The land in Bandar Pinggiran Subang, with a 99-year lease expiring in 2096, has a corner detached factory built on it.

Karyon said KMSB has ceased business in March last year and the disposal represents an opportunity for the group to unlock the value of assets that do not contribute towards its core business as the property was still not in use.

The disposal would also discharge the group from the property's future holding and maintenance costs, it said.

"The board is of the opinion that it would be more efficient to utilise the proceeds received for (the group's) working capital purposes rather than leave property idle," it added.

"The proposed disposal is not expected to materially affect the earnings and earnings per share (EPS) of the group.

"However, it is expected to contribute positively to its earnings and EPS as it will result in a gain of approximately RM3.5 million for the financial year ending March 31, 2017," said Karyon.

The disposal is expected to be completed by the fourth quarter of 2016.

Shares of Karyon closed half a sen or 2.78% lower at 17.5 sen for a market capitalisation of RM83.25 million.