Thursday 28 Mar 2024
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KUALA LUMPUR (July 1): Tropicana Corp Bhd is selling a freehold plot measuring 251.6 acres in Gelang Patah, Johor Bahru, Johor, for RM569.9 million cash, to raise funds for working capital and/or to repay the group's bank borrowings, in line with its de-gearing exercise to strengthen its financial footing.

The group expects to realise a gain on disposal of about RM55.5 million, said Tropicana in a bourse filing today.

Its original cost of investment stood at RM366.6 million, while its net book value as at Dec 31, 2015, was RM413.7 million.

“The net proceeds of approximately RM218.4 million after repayment of bank borrowings, taxes and related expenses arising from the disposals are expected to be utilised for the working capital, as well as repayment of bank borrowings of Tropicana and its group of companies,” it said.

The sales and purchase agreement to effect the disposal was inked with Tiarn Oversea Group Sdn Bhd by Tropicana Desa Mentari Sdn Bhd (TDM), a wholly-owned unit of Tropicana Golf & Country Resort Bhd, which is in turn a wholly-owned unit of Tropicana.

The SPA is conditional upon some conditions precedent, like TDM having applied for and obtained the relevant development order or approval in accordance with the proposed development plan which was prepared, determined and agreeable by Tiarn, at the cost and expenses of Tiarn.

TDM has also to apply for and obtain additional infrastructure construction approvals like the right to construct a highway interchange on the land, and the right to enlarge an existing tunnel marked in the layout plan.

Other conditions include approval for conversion of category of land use and sub-division of the land. Parts of the vacant plot are now listed for agriculture and industrial use.

Tiarn intends to undertake a two-phase development on the land, with phase 1 comprising 60 acres and the remainder 191.6 acres constituting the second phase.

Tropicana expects to complete the disposal for which it will be paid in stages over five years, in the second half of 2022.

As at closing today, Tropicana was unchanged at RM1.03 with only 26,400 shares traded, valuing it at approximately RM1.47 billion.

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