PLB Engineering to gain RM5m from disposal of land

KUALA LUMPUR (Dec 13): PLB ENGINEERING BHD [] expects a one-off net gain of RM5 million from the disposal of a piece of freehold land in Seberang Perai for RM22.18 million.

The company said on Tuesday that its wholly owned sub-subsidiary
Pelangi Sehati Development Sdn Bhd had entered into an agreement with
Chin Hin Land Sdn Bhd to dispose the land.

PLB Engineering said its cost of investment in the land was RM6.34
million and that the land was acquired in July 2005, adding that the net
book value of the land is RM10.24 million as per Pelangi’s audited
financial statements as at Aug 31, 2011.

The company said the entire proceeds from the disposal (net of estimated expenses) would utilised to pare down its borrowings.

The company said that as at Aug 31, 2011, its total bank borrowings amounted to approximately RM56.98 million.

“Assuming the entire proceeds from the disposal were utilised to pare
down borrowings, the annual savings in interest is expected to be
approximately RM1.6 million based on an average interest rate of
approximately 8% per annum.

“The proceeds from the disposal are expected to be fully utilised in 2012,” it said.

PLB Engineering said the disposal was in line with its strategy of
preserving capital value and strengthening the balance sheet via
realising assets which can then be deployed in other projects and
investments to maximise the returns and/or for repayment of borrowings.