KUALA LUMPUR (June 13): Hap Seng Consolidated Bhd said its property development unit is disposing of a 20-acre vacant land it owns in Tawau, Sabah, for RM27.14 million.

The proposed disposal of the land to Goldcoin Ventures Sdn Bhd is expected to give rise to a net gain of approximately RM20.26 million to the Hap Seng Consolidated group.

Goldcoin Ventures is a wholly-owned subsidiary of Akal Megah Sdn Bhd, which is in turn a unit of Hong Kong-based Lei Shing Hong Ltd (LSH).

The transaction is a related party transaction, as Tan Sri  Lau Cho Kun @ Lau Yu Chak is deemed to have a 50.1% shareholding in LSH and a major shareholder of Gek Poh (Holdings) Sdn Bhd, according to the filing to Bursa Malaysia.

Gek Poh holds 12.42% shares of LSH and it is also the holding company of Hap Seng Consolidated with an aggregate shareholding of 60.83%.

Hap Seng Consolidated said in the filing that it invested in the leasehold land -- located within the Bandar Sri Indah development at Mile 10, Apas Road -- in 2004 for RM315,281.

It added that the disposal consideration would be utilised to reduce the group’s borrowings or used as the group’s working capital within 12 months from the completion date of the proposed disposal.

Assuming that the proposed disposal had been effected at the end of its financial year ending Dec 31, Hap Seng Consolidated said its earnings per share would have increased by some 0.81 sen.

Its net assets per share would improve by approximately one sen, while net gearing of the group would have decreased from 0.54 to 0.53 times.

Shares in Hap Seng Consolidated closed 13 sen or 1.31% lower today at RM9.77 apiece, bringing a market capitalisation of RM24.32 billion.