KUALA LUMPUR (June 29): AEON Co (M) Bhd is disposing of a piece of freehold land together with the two-storey AEON Mahkota Cheras Shopping Centre built on the land for RM87.8 million.

In a filing with Bursa Malaysia, AEON said the disposal is in line with its corporate strategy of focusing and developing its future retail business.

The buyer of the property — used for operating a shopping centre with car parks and departmental store-cum-supermarket — is Foremost Wealth Management Sdn Bhd.

AEON said Foremost Wealth is an investment holding company with a paid-up share capital of RM1 million, but did not disclose the owner of the entity.

The group said the net book value of the property for the financial year ended Dec 31, 2016 (FY16) was RM67.4 million and the age of the building is seven years.

Upon completion of the disposal, AEON expects to book a gain of MR17 million after adjusting for expenses and taxes for FY17.

The group said the cash proceeds are intended to be used as working capital and to reduce borrowings. It expects the disposal to be completed in four months.

The group had been looking for a buyer since about 18 months ago. The Edge weekly had reported that AEON was looking to dispose of the property for at least RM80 million in October 2015.

AEON’s share price fell three sen or 1.32% to RM2.24 today, giving a market capitalisation of RM3.15 billion.