KUALA LUMPUR (Dec 16): CAB Cakaran Corp Bhd said Like Store Sdn Bhd, a 51%-owned unit of CAB Cakaran Sdn Bhd, which is in turn a wholly owned subsidiary of the group, is buying 25 pieces of agricultural land in Johor for RM41 million.
The group said Like Store has entered into sale and purchase agreements to buy 18 pieces of land from Flavour Right Sdn Bhd for RM30.8 million, five from Positive Honour Sdn Bhd for RM8.1 million, and two from Banghong Agri Resources Sdn Bhd for RM2.1 million.
In its filing to Bursa Malaysia today, it said the acquisitions will be funded through internally generated funds and external borrowings, but have not determined the breakdown between the sources of funding.
Assuming 90% of the acquisition would be funded by borrowings, the group said its gearing will increase to 1.05 times.
"The acquisition will enable the CAB group to expand its poultry business to the southern region of Peninsular Malaysia and provide the group a springboard to export live broiler to Singapore.
"The acquisition would also increase the group's broiler farming capacity and facilitate CAB's continuing growth in its broiler trading operations in the domestic market," it added.
It expects to increase its broiler production capacity by approximately 3.5 million birds per cycle with the acquisition of the lands, while also increasing its upstream poultry activities.
The group said the acquisition will provide an additional income stream to CAB, thus contributing positively to CAB in the medium to long term.
CAB expects to complete the acquisitions within three months of completing the conditions precedent.
The counter fell 3 sen or 3.13% to 93 sen today, bringing its market capitalisation to RM123.01 million.