PKNP transfers Perak land sale rights to Perak Corp’s unit

• On Dec 16 last year, PKNP had signed a sale and purchase agreement to dispose of the land to LLSB for RM4.05 million cash. The original cost of investment of the land was RM1.6 million.

KUALA LUMPUR (Sept 27): Perak State Development Corp (PKNP) has decided to transfer its rights in a 100-acre piece of leasehold agriculture land in Temelong, Perak to Practice Note 17 (PN17) company Perak Corp Bhd’s indirect 89.54%-owned subsidiary Casuarina Meru Sdn Bhd (CMSB).

In a filing with Bursa Malaysia on Wednesday, Perak Corp said CMSB has entered into a novation agreement with PKNP, oil palm and rubber plantation company Ladang Lekir Sdn Bhd (LLSB), Perak Agro Management Services Sdn Bhd and Perak Agropreneur Sdn Bhd for the novation.

On Dec 16 last year, PKNP had signed a sale and purchase agreement to dispose of the land to LLSB for RM4.05 million cash. The original cost of investment of the land was RM1.6 million.

The proposed disposal is expected to result in an estimated net gain of RM1.965 million.

Perak Corp said PKNP has agreed to pay the total due to CMSB, amounting to RM2.23 million, by the first quarter of 2024 (1Q2024). CMSB intends to use the balance of the sale proceeds of RM2.48 million to pay creditors and real property gain tax.

“Given that the land is a non-core asset of CMSB, the proposed disposal provides an opportunity for CMSB to realise the value of the land, in order to repay its creditors and improve the liquidity of the group, as well as strengthen the group’s financial position,” said Perak Corp.

Based on the audited financial statements of Perak Corp for the financial year ended Dec 31, 2022, the proforma effect of the proposed disposal on the net assets per share of the company is expected to increase by two sen per share and will reduce the group’s gearing ratio by 1%.

The proposed disposal is not subject to the approval of the shareholders of Perak Corp. Barring any unforeseen circumstances, the proposed transaction is expected to be completed by 1Q2024.

Debt-ridden Perak Corp, a 52.5%-owned subsidiary of PKNP, fell into PN17 status in February 2020, as a result of a default in payment and its inability to declare solvency.

Perak Corp shares closed down 0.5 sen or 1.67% at 29.5 sen on Wednesday, giving it a market capitalisation of RM29.01 million.

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