PETALING JAYA (July 2): Sapura Industrial Bhd has signed a sale and purchase agreement (SPA) to dispose of two adjoining leasehold industrial land parcels in Bandar Baru Bangi, Selangor, for RM42.33 million in cash, as part of its strategy to unlock value from non-core assets and reinvest into its manufacturing operations.

The disposal involves two vacant 99-year leasehold industrial plots in Persiaran Usahawan, Taman IKS, Section 9, known as Lot 5 and Lot 7, which together cover approximately 40,964 sq m.

The transaction was entered into between Sapura Industrial Bhd and Zeito Plastic Components Sdn Bhd, with the price agreed on a willing-buyer willing-seller basis, supported by an independent valuation of RM40.60 million.

Payment structure and conditions

The RM42.33 million consideration will be paid in stages, including deposits already made, with the remaining 90% balance payable within 90 days after all conditions precedent are fulfilled. These conditions include shareholder approval, state authority consent for transfer, termination of existing tenancies and any required regulatory approvals.

If payment is delayed, a 30-day extension will be granted, during which interest at 8% per annum will apply on the outstanding amount.

Use of proceeds

Sapura Industrial plans to channel the proceeds into its core manufacturing business. About RM23.12 million will be used to expand its automotive manufacturing operations, including stabiliser bars, coil springs and brake discs.

A further RM12 million is allocated for land or property acquisition to build new facilities closer to key customers, RM3.11 million for working capital, and RM4.09 million for transaction-related expenses including taxes and professional fees.

The group originally acquired the land in 2004 for plant expansion but now views the disposal as an opportunity to realise capital gains and improve operational efficiency.

Financial impact

The disposal is expected to generate a pro forma net gain of approximately RM29.14 million after costs and taxes. If completed, Sapura Industrial’s net assets per share would increase from RM1.65 to RM2.05, while gearing would improve from 0.40 times to 0.32 times.

Earnings per share could also rise significantly on a pro forma basis due to the one-off gain.

The transaction is classified as significant under Bursa Malaysia’s listing requirements, as it represents 35.19% of the group’s net assets.

Key Takeaways

The disposal reflects Sapura Industrial’s strategy of monetising long-held land assets to strengthen its balance sheet and reinvest in core manufacturing operations. By converting non-core property into cash, the group aims to expand production capacity, improve operational efficiency and reduce gearing. The transaction also highlights how industrial companies are actively rebalancing asset portfolios to support long-term manufacturing competitiveness.