KUALA LUMPUR (March 12): Kossan Rubber Industries Bhd is buying two pieces of land in Bidor, Perak from Perbadanan Kemajuan Negeri Perak (PKNP) for RM82.42 million cash.
The group said it plans to use the land for its integrated glove manufacturing expansion.
In a filing with Bursa Malaysia today, Kossan said its subsidiary Premium Medical Products Sdn Bhd has entered into a sale and purchase agreement (SPA) with PKNP for the land measuring 824.11 acres.
One of the pieces of land measuring 6.718 acres was acquired by PKNP at RM671,699.23. The lease will expire on Nov 22, 2114.
Another piece of land measuring 817.392 acres was acquired at RM81.75 million. The lease will expire on Nov 22, 2114.
Kossan said the proposed acquisition will be funded by internal funds.
"The proposed acquisition is intended to accommodate Kossan Group’s expansion in a centralised location over the medium and longer term. Its strategic location with abundant sources of utilities (natural gas, electricity and water) and the availability of local manpower will facilitate the group’s expansion programme," it added.
The proposed acquisition is expected to enhance future earnings of the group when the proposed development of the land comes onstream subsequently.
Kossan said the proposed acquisition is expected to be completed in the first quarter of 2019.
Kossan shares closed 29 sen or 3.69% up at RM8.15 today with 661,300 shares done, bringing a market capitalisation of RM5.21 billion. The counter has risen 33% in the past year.