Hot Stock Bertam gains 2.08% on plan to sell land for RM128 million

by **Cals** Sat 09 Jul 2016, 18:27

Hot Stock

[size=28]Bertam gains 2.08% on plan to sell land for RM128 million

By Surin Murugiah / theedgemarkets.com | July 8, 2016 : 11:11 AM MYT
KUALA LUMPUR (July 8): Bertam Alliance Bhd shares advanced 2.08% this morning after the company said it is selling two parcels of freehold land at Batu 9, Cheras, with a collective land size of 47,930 sq m (11.8 acres) to a unit of Guocoland (Malaysia) Bhd, for RM128 million.

At 10.48am, Bertam added 1 sen to 49 sen with 205,500 shares done.

Bertam announced to Bursa Malaysia on Tuesday that it expects to recognise a RM79.84 million disposal gain arising from the land deal.

The sale was effected through Bertam's unit MV Properties Sdn Bhd, which inked a sale and purchase agreement with Tujuan Optima Sdn Bhd, Guocoland's subsidiary.

The land's audited net book value (NBV) was RM42.96 million as at Dec 31, 2015 (FY15). It was valued at RM125.11 million, as appraised by independent valuer DTZ Nawawi Tie Leung Property Consultants Sdn Bhd, on March 19, 2016.

The proceeds will be utilised for borrowings repayments and working capital. Upon that, the group should have zero gearing and enjoy an interest cost savings of about RM7.3 million a year based on the effective rate of 6% to 8.6% per annum.

The company has accumulated losses of RM38.51 million, while total borrowings stood at RM103.87 million as at Dec 31, 2015 (FY15).

Meanwhile, Guocoland intends to fund the deal fully by cash via internally generated funds and/or bank borrowings.

Guocoland does not need to seek approval from its shareholders for the land purchase. But Bertam need shareholders' approval for the sale.
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