KUALA LUMPUR (July 8): Hexza Corp Bhd is disposing of a 2.83-ha (6.99 acres) piece of leasehold industrial land located in Selat Klang Utara, Klang, Selangor, and the buildings attached to it for RM17 million, as it moves to discontinue a subsidiary’s loss-making business and proceed with the disposal of its assets.

In a filing with Bursa Malaysia, Hexza (fundamental: 1.45; valuation: 2.6) said its wholly-owned subsidiary Norsechem Resins Sdn Bhd (NRSB) had entered into a sale and purchase agreement with Crystal Dignity (M) Sdn Bhd (CDSB) for the said disposal.

Hexza’s board of directors said the disposal is in line with the move to discontinue NRSB’s production of formaldehyde and formaldehyde-based resins in Port Klang since the business is loss-making.

“NRSB has been incurring business losses for many years. Effort for the past years to turn around NRSB was not successful,” Hexza said, adding that hence it decided to proceed with the disposal of NRSB’s assets.

“NRSB entered into agreement with CDSB for the sale of the property and negotiations for the sale of plant and machinery to an interested party is ongoing since CDSB is not interested in the plant and machinery,” it added.

Hexza said the disposal is expected to contribute a net gain on disposal of about RM6.6 million or 3.3 sen per share to the group.

The disposal is expected to be completed by March 2016.

Hexza fell two sen or 2.5% to 78 sen today, giving it a market capitalisation of RM160.3 million.

(Note: The Edge Research's fundamental score reflects a company’s profitability and balance sheet strength, calculated based on historical numbers. The valuation score determines if a stock is attractively valued or not, also based on historical numbers. A score of 3 suggests strong fundamentals and attractive valuations.)