Harn Len sells Johor land for RM55m

• Harn Len said the land parcel, currently being used as public parking, is located along Jalan Ngee Heng. It is about 100m to the east of the proposed Rapid Transit System Link (RTS Link) station that is under construction.

KUALA LUMPUR (Sept 24): Plantation company Harn Len Corp Bhd (KL:HARNLEN) said on Tuesday that it has inked a sale and purchase agreement (SPA) to dispose of a parcel of land in Johor Bahru for RM55 million.

According to a bourse filing, the SPA was entered between Harn Len’s wholly owned subsidiary Midwest Equity Sdn Bhd (MESB) and Starsea Resources Sdn Bhd.

Harn Len said the land parcel, currently being used as public parking, is located along Jalan Ngee Heng. It is about 100m to the east of the proposed Rapid Transit System Link (RTS Link) station that is under construction.

With a net book value of RM16.8 million, the land disposal, upon completion, will enable the company to book a net gain of approximately RM33.6 million.

“The consideration of RM55 million is at a 71.88% premium to the RM32 million market value ascribed by the valuer,” Harn Len noted.

It said the land disposal enables the company to realise the land value, which is part of its non-core assets and provide a surplus cash flow for capital expenditure and general working capital purposes.

“The group proposes to utilise RM29.4 million to fund capital expenditure which shall relate to the group’s existing/potential business activities such as plantation, aquaculture and investment properties.

“Such capital expenditure may include, amongst others, replanting expenses, land clearing and infrastructure improvements,” it said.

The company has also earmarked RM20 million from the sale proceeds to finance the day-to-day operations.

The land sale is expected to be completed within six months from the date of the SPA and may be further extended for another two months to fulfil the condition precedent in the SPA.

Based on Tuesday’s closing, shares in Harn Len closed up half sen or 1.4% to 36.5 sen, giving it a market capitalisation of RM213.25 million.

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