Power Root to sell Indonesian land, office building for RM4 mil

by **Cals** Fri 11 Dec 2015, 22:01

Power Root to sell Indonesian land, office building for RM4 mil

By Chen Shaua Fui / theedgemarkets.com | December 11, 2015 : 8:26 PM MYT

KUALA LUMPUR (Dec 11): [size=16]Power Root Bhd ([You must be registered and logged in to see this image.] Valuation: 2.10, Fundamental: 3.00)'s wholly-owned unit PT Natbio Marketing Indonesia (PTNMI) planned to dispose of a piece of land, including the building attached, in Central Park, Indonesia, for a cash consideration of 13 billion rupiah (RM4 million) to PT Citra Mulia Karya Pradana (PTCMKP).

In a filing to Bursa Malaysia today, Power Root said that PTNMI had on Dec 10, 2015 entered into a sale and purchase agreement (SPA) for the disposal of the property with PTCMKP.

The size of the land is 807.29 square feet, while the building, a four-storey shop office, has a built-up area of 3,229.17 square feet.

The disposal would net the energy drink manufacturer an estimated gain of approximately 8.9 billion rupiah (RM2.7 million) based on the net asset value of the property of 4.1 billion rupiah (equivalent to RM1.3 million) in the latest published audited financial statements as at March 31, 2015.

This will translate to an estimated increase in earnings per share of 0.9 sen per share.

The disposal will not have any material effect on the net assets and gearing of the Power Root Group for the financial year ending March 31, 2016.

Power Root said that the disposal consideration of 13 billion rupiah (equivalent to RM4 million) was arrived at on a willing-buyer willing-seller basis, after taking into consideration the prevailing market value of the commercial property based on previous transactions within the same location.

"The disposal consideration of 13 billion rupiah (equivalent to RM4 million) was fully paid on the date of the agreement," it said.

The proceeds arising from the disposal, which amounted to 12.22 billion rupiah (RM3.76 million), is intended to be utilised as working capital, while the remaining 780 million rupiah (RM240,000) would be expenses in relation to the disposal.

Power Root noted that the said property is under-utilised and the disposal would also allow the group to optimise the allocation of its capital in order to maximise its returns on investment through the utilisation of the proceeds from the disposal.

Shares in Power Root dropped 3 sen or 1.07% to close at RM2.77, for a market capitalisation of RM836.7 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.)
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