Kobay sells unused property for RM7 mil

KUALA LUMPUR (Dec 30): Kobay Technology Bhd is selling an unused piece of industrial land in Ipoh, Perak for RM7 million or RM57 per sq ft.

The engineering components manufacturer’s filing with Bursa Malaysia yesterday said the transaction will add RM2.2 million or 3.2 sen per share to its earnings for the financial year ending Jun 30, 2016 (FY16), nearing the RM2.8 million profit it netted in 1QFY16.

Meanwhile, the sale will also make Kobay’s book value per share rise by 3.2 sen in FY16. As at 1QFY16, its net asset value per share stood at RM2.07.

“The property is not in use currently and is of an excess within the group. Hence, the management is of the view that it shall be disposed of, so [as] to utilise the cash consideration for the group’s working capital,” said Kobay on the rationale for the disposal.

It added that the sale proceeds will be used within FY16.

Kobay’s wholly owned subsidiary Paradigm Precision Machining Sdn Bhd (PPM) is set to sell the leasehold land, which comes with a single-storey factory, to clothing manufacturer Messrs TopFur Dressing Industries Sdn Bhd.

Kobay said the land measures 449,801.59 sq ft, with the built-up area covering 122,123.22 sq ft. PPM bought the property in December 2007, at an original investment cost of RM5.5 million. The land’s net book value as at end-FY15 was RM4.7 million.

“The sale consideration of RM7 million is arrived at, on a willing buyer-willing seller basis. Based on the built up area of 122,123.22 sq ft, the consideration is approximate to RM57 per square foot,” it added.

Kobay shares was unchanged at RM2.20 each at yesterday’s close, keeping its market capitalisation at RM151 million.