PETALING JAYA: Property developer SP Setia Bhd has proposed to sell eight parcels of freehold land measuring 388.4 hectares in Tebrau, Johor Bahru, to Scientex Bhd for RM547.65 million.
This is its second attempt to dispose of the Tebrau land to the Scientex group after the termination of an earlier agreement made with Scientex’s wholly-owned subsidiary Scientex Quatari Sdn Bhd in March this year due to non-fulfilment of a condition precedent.
In a filing with Bursa Malaysia, SP Setia said its wholly-owned unit Pelangi Sdn Bhd inked today a conditional agreement with Scientex Lestari, which is 70% owned by Scientex Quatari and 30% by Azman Mahmud, for the proposed sale.
“The proposed disposal is in line with the group’s direction to optimise and rebalance its landbank while maintaining an efficient capital structure,” it said.
On May 7, 2021, SP Setia announced the proposed disposal of the same land to Scientex Quatari for RM518.15 million. However, it said the agreement lapsed due to non-fulfilment of a condition precedent, specifically in relation to the approval from the Economic Planning Unit (EPU).
This condition precedent is expected to be satisfied with the current proposal, it said, adding that the deal is targeted for completion by the second quarter of next year.
“The proposed disposal will improve the group’s gearing level and allow acceleration of project development and growth of SP Setia’s remaining townships in Johor,” SP Setia said.
Meanwhile, Scientex said in a statement that the group plans to launch a new mixed township development project on the land, which will include about 12,000 affordable houses.
The property developer and packaging manufacturer said the land acquisition will markedly expand its property development footprint in Johor, adding to its existing six townships located in Pasir Gudang, Kulai, Skudai, Senai, Pulai, and Kota Tinggi.
Scientex CEO Lim Peng Jin said the new township development aligns with the group’s vision of constructing 50,000 affordable homes in Peninsular Malaysia by 2028.
“As of June 30, we have reached the milestone of delivering 29,000 homes, which reflects our steady progress. This strategic expansion enables us to create a vibrant township in Mukim Tebrau and contribute to Johor’s development,” he said.
Scientex said upon completion, the group’s total landbank across Johor, Melaka, Negeri Sembilan, Selangor, Perak, Penang, and Kedah would expand to about 3,100 hectares.
“The proposed land acquisition is subject to approval by the Estate Land Board and the EPU, and if required, the approval of Scientex’s shareholders.
“The acquisition will be financed by internally generated funds and bank borrowings, with completion targeted for the first half of 2024,” it added.
Scientex’s shares were up five sen or 1.46% at RM3.47, giving it a market capitalisation of RM5.38 billion. SP Setia’s share price rose half-a-sen or 0.89% at 56.5 sen, valuing it at RM2.28 billion.
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