KUALA LUMPUR (May 13): Diversified property developer and construction group Iskandar Waterfront City Bhd (IWCity) on Friday announced it is disposing of two parcels of vacant unconverted developed land in Tanjung Danga, Johor to construction and property developer Knusford Bhd.

The combined size of the two parcels of freehold land spans 9.841 acres.

In a bourse filing, IWCity said its wholly-owned subsidiary Success Straits Sdn Bhd entered into a heads of agreement with Knusford or its nominee for an indicative disposal consideration ranging from RM90 million to RM95 million.

The final consideration shall be determined based on the valuation opined by the independent valuers mutually agreed to be appointed by both parties. According to IWCity, the original cost of the land is approximately RM93.38 million, which was acquired on March 3, 2017.

This is a related party transaction as businessman Tan Sri Lim Kang Hoo is the common shareholder of the companies. Lim, who is the executive vice chairman and a major shareholder of IWCity, holds 0.6% direct interest and 34.29% indirect interest through Iskandar Waterfront Holdings Sdn Bhd and Credence Resources Sdn Bhd.

He is also a major shareholder of Knusford with 0.62% direct interest and 32.53% indirect interest by virtue of his shareholdings in Aman Setegap Sdn Bhd and Kinston Park Sdn Bhd.

IWCity said that the proposed disposal provides an opportunity for the company to unlock value for the investment made in the land and secure proceeds as well as for potential use for settlement of the amount owing between the parties.

Meanwhile, Knusford in its bourse filing said that properties are located within Kampung Tanjung Danga, on the western part of Johor Bahru next to Lebuhraya Sultan Iskandar, which is located approximately 13 kilometres from the west of Johor Bahru city centre.

Knusford explained that the proposed acquisition is intended to increase the group's landbank in Johor Baru which could potentially be utilised for future development in view of the upcoming Johor Baru-Singapore Rapid Transit System (RTS) project.

"The mode of payment for the proposed acquisition will be via partial settlement of the outstanding amount owing to the group," said Knusford.

IWCity's share price finished 3.23% or one sen higher at 32 sen, bringing a market capitalisation of RM290.29 million, while Knusford shares were last done at 55 sen, valuing the company at RM54.8 million.