KUALA LUMPUR (July 28): Tatt Giap Group Bhd, a loss making stainless steel pipe maker, is selling its property in Shah Alam, which spans a 86,876 sq ft land, for RM15.5 million to Tan Chong Motor Holdings Bhd's wholly-owned subsidiary Tan Chong Ekspres Auto Servis Sdn Bhd.

In its filing with Bursa Malaysia today, Tatt Giap said its wholly-owned subsidiary Tatt Giap Hardware Sdn Bhd had entered into a sale and purchase agreement with Tan Chong Ekspres to dispose of the property.

The Shah Alam leasehold land comes with a single-storey detached warehouse and a double-storey office building.

The group will be utilising RM10 million from the sales proceeds to repay bank borrowings, RM5.4 million for working capital, and the remaining RM100,000 for expenses in relation to the proposed disposal.

"The proposed disposal provides an avenue for Tatt Giap to unlock and realise the value of the Shah Alam property and to strengthen the Tatt Giap group's financial position," the filing read.

"The disposal price of RM15.5 million represents an appreciation in the value of the Shah Alam Property since its acquisition," the group added.

Tatt Giap Hardware acquired the property on Nov 4, 2011 at a cost of RM12.2 million; it was revalued on March 31, 2016 for RM15 million.

The disposal requires the approval of Tatt Giap's shareholders through an extraordinary general meeting, which will be held in October, and the group expects to complete the proposal by November.

Tatt Giap shares were not traded today. The stock was last traded at 12 sen, with a market capitalisation of RM155.1 million.