KUALA LUMPUR (Dec 13): Glove maker Hartalega Holdings Bhd is buying land for RM54.32 million for its expansion plan.

Hartalega's wholly owned unit, Hartalega NSM Sdn Bhd (HNSM), signed an agreement with Northern Gateway Sdn Bhd' (NGX) unit Northern Gateway Free Zone Sdn Bhd (NGFZ).  

NGX — wholly owned by Minister of Finance Inc — is the master developer of Delapan Special Border Economic Zone (Delapan SBEZ) following the approval of the Delapan Master Development Plan by the relevant authorities on Jan 13, 2019.

NGX had successfully obtained government approval for Free Commercial Zone and Free Industrial Zone for the Delapan SBEZ and any commercial or industrial activity within the Delapan SBEZ subject to the Free Zones Act 1990 and other laws, regulations, rules or guidelines applicable thereto.

The purchase price of RM54.32 million for the land translates into RM20.78 per square foot. The acquisition will be funded by internally generated funds or existing credit facilities of the group, Hartalega said in a Bursa Malaysia filing on Tuesday (Dec 13).

"The acquisition of the said land marks Hartalega's preparation for latest phase of growth," it said, adding that the exercise is estimated to be completed by July 12, 2023.

In March 2021, HNSM and NGFZ inked an agreement to purchase approximately 250 acres of land owned by NGFZ. But the agreement was terminated due to the inability of the parties to fulfil conditions provided in the agreement — with NGFZ refunding RM22.87 million to HNSM.

Hartalega's shares finished five sen or 3.09% lower at RM1.57 on Tuesday, valuing the group at RM5.38 billion. Its share price has depreciated 72.16% year-to-date.