The land, owned by Compugates’ 70%-owned subsidiary Compugates Development and Mining Sdn Bhd (CDMSB), has a market value of RM134.6 million, while its audited net book value stood at RM95.62 million as of end-December 2023, said Compugates.
KUALA LUMPUR (Jan 31): Compugates Holdings Bhd (KL:COMPUGT) said it has teamed up with a property developer to undertake a mixed-use development on a 14.5-hectare land in Cyberjaya with an estimated gross development value (GDV) of RM1.36 billion.
The land, owned by Compugates’ 70%-owned subsidiary Compugates Development and Mining Sdn Bhd (CDMSB), has a market value of RM134.6 million, while its audited net book value stood at RM95.62 million as of end-December 2023, said Compugates.
Through CDMSB, Compugates will be entitled to a minimum landowner’s entitlement of RM234 million, representing a 73.85% premium over the market value of the land. The proceeds will be used to fund Compugates group’s future expansion plans and working capital requirements, according to Compugates’ bourse filing.
The group expects to record a pro forma net gain of RM83.3 million upon completion of the proposed joint venture (JV), which is set to be completed over a 13-year period.
The JV agreement signed between CDMSB and the developer, CPG Puncak Sdn Bhd, on Friday is deemed as a related party transaction. Compugates chief executive officer and substantial shareholder Goh Kheng Peow is the father of Compugates’ group general manager Keane Goh, who is also a shareholder and director of CPG.
Additionally, Compugates’ executive director and substantial shareholder See Thoo Chan is deemed interested in the JV by virtue of being Keane Goh’s mother.
MainStreet Advisers Sdn Bhd has been appointed to advise the non-interested directors and non-interested shareholders of Compugates on whether the JV is fair and reasonable and whether it is detrimental to Compugates’ non-interested shareholders.
Compugates currently operates three business segments: trading and services, property development, and agriculture. While the trading and services segment has been the group’s primary revenue driver, it has faced losses in recent years due to challenging market conditions, including the Covid-19 pandemic, the weakening of the ringgit, geopolitical tensions, and stricter payment terms imposed by suppliers.
Hence, the JV aligns with the group’s long-term plan to expand its property business, reducing its reliance on the loss-making trading and services segment, while also providing an additional income stream, said Compugates.
“The board [save for the interested persons] had decided to undertake the proposed JV instead of an outright sale of the development land after taking into consideration that CDMSB may obtain a higher return for the development land through the minimum landowner’s entitlement, as opposed to an outright sale of the development land,” said Compugates.
The development is expected to begin immediately once CPG obtains all necessary approvals — which is expected to take approximately six months — from the Sepang Municipal Council and other relevant authorities.
The project is planned for completion over 13 years, with an automatic three-year extension, and any further extensions will be subject to mutual agreement between Compugates and CPG.
Shares of Compugates closed down half a sen or 33.33% at one sen on Friday, giving the group a market capitalisation of RM90.8 million.
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Source: EdgeProp.my
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