Ge-Shen selling 4.61-acre land in JB for RM35 mil

• Ge-Shen said the RM35 million disposal consideration represents an 8.57% discount to the land's RM38.28 million market value, ascribed by Irhamy Valuers International Sdn Bhd in November 2023.

KUALA LUMPUR (Feb 4): Ge-Shen Corp Bhd (KL:GESHEN) is to sell Johor Bahru land measuring 4.61 acres in aggregate, with an office, a warehouse, and a factory built atop, for RM35 million in cash.

The company’s wholly owned unit Ge-Shen Plastic (M) Sdn Bhd inked a binding term sheet with Plastico Sdn Bhd for the disposal of the five parcels of land, according to the plastic component manufacturer’s bourse filing on Tuesday.

Ge-Shen said the RM35 million disposal consideration represents an 8.57% discount to the land's RM38.28 million market value, ascribed by Irhamy Valuers International Sdn Bhd in November 2023.

The company expects to book a pro forma gain of RM14.26 million from the land sale.

On the purchaser, Ge-Shen said Plastico is a precision plastic components and parts manufacturer. Its shareholders comprise Teo Gee Lian with a 55% stake, Too Siau Chen with 30% and Teo Gee Teck with 15%.

Ge-Shen said proceeds from the land sale will be used to repay borrowings tied to the properties as well as finance the group’s working capital.

“The utilisation of the said proceeds is expected to contribute positively to the future cash flow of the group when it materialises and the repayment of the bank borrowings will enable Ge-Shen to lower its gearing ratio,” the company said.

“Besides, this will allow Ge-Shen to streamline the operations of the group by improving efficiency and optimise the utilisation of the assets owned by the group,” it added.

Ge-Shen CEO Adrian Foong Hong Nian in a separate statement said the move will allow the group to streamline operations and consolidate its manufacturing facilities, enhancing efficiency and resource allocation.

"The proceeds from this transaction will enable us to reinvest in high-value areas that drive innovation and efficiency," he said.

The land sale is expected to be completed in the third quarter of 2025, according to Ge-Shen.

It added that it aims to reinforce its competitiveness in high-growth industries such as electronics, medical devices, and industrial components manufacturing.

Shares in Ge-Shen ended 10 sen or 2.09% higher at RM4.88, valuing the company at RM655.99 million.

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