KUALA LUMPUR (July 27): Y&G Corp Bhd is acquiring a 16.79ha piece of commercial leasehold land located off Jalan Bandar Tasik Puteri in Rawang, Selangor, which it intends to develop into a mixed development.

"However, the proposed development is still in its preliminary stages and is still subject to the planning and the development approvals from the relevant authorities upon the completion of the proposed acquisition," the property developer said in a filing with Bursa Malaysia today.

"Therefore, it is too preliminary to ascertain the indicative gross development value at this juncture," Y&G added.

Y&G today signed a share sale agreement with four individuals to acquire Maha Harapan Sdn Bhd (MHSB) for RM4.68 million. MHSB is in the midst of acquiring the 16.79ha piece of land, which has an unaudited net book value of RM37.27 million as at June 30, 2015, from Sapphire Plenitude Sdn Bhd. The land lease will expire on Nov 24, 2093.

"The land is currently free from all encumbrances except for the charge in favour of Sabah Development Bank Bhd for loan facilities granted to Sapphire Plenitude, in which the latter has an outstanding sum of RM33.21 million due as at March 5, 2015 plus interest accrued thereon until its full settlement.

Y&G said the proposed acquisition of MHSB will be funded via internal funds arising from its recently completed proposed private placement with warrants and proposed rights issue with warrants.

On the rationale, Y&G said it is part of the group's objective of concentrating on its core businesses of property development by further increasing its land bank size. 

The acquisition is expected to contribute positively to its revenue, profit and cash flow from the financial year ending Dec 31, 2016 onwards, it added. 

The group expects the deal to be completed by the third quarter of the current financial year ending Dec 31, 2015.

Shares in Y&G (fundamental: 3; valuation: 2) fell two sen or 1.31% to close at RM1.51 today, for a market capitalisation of RM305.06 million. 

(Note: The Edge Research's fundamental score reflects a company’s profitability and balance sheet strength, calculated based on historical numbers. The valuation score determines if a stock is attractively valued or not, also based on historical numbers. A score of 3 suggests strong fundamentals and attractive valuations.)