KUALA LUMPUR (Dec 20): Kimlun Corp Bhd is buying a plot of freehold agriculture plot measuring 11.734ha in Pulai, Johor, from UEM Sunrise Bhd for RM82.1 million to develop commercial properties.

The purchase is being undertaken via its indirect wholly-owned unit Kii Morris Sdn Bhd, which inked the sale and purchase agreement with UEM's unit Nusajaya Greens Sdn Bhd yesterday, according to the group's filing with Bursa Malaysia.

The purchase consideration will be financed using internal funds and/or external borrowings. Assuming that RM50 million or some 60% of the purchase consideration is financed via external borrowings, Kimlun said its gearing, which stood at 0.06 times as at Dec 31, 2016, is expected to increase by 0.09 times.

The proposed acquisition, it added, provides an opportunity for the group to expand its landbank and enhance its future revenue and earnings.

The group plans to apply to the Johor state authority to convert the land from agriculture use to commercial within a year after the acquisition is completed.

As the development potential has yet to be detailed or finalised at this preliminary stage, the total development revenue/cost, expected commencement and completion date or expected profits to be derived cannot be readily ascertained, it explained.

It expects the proposed acquisition to be completed in the fourth quarter of 2018.

Kimlun shares closed unchanged at RM2.25 yesterday, bringing its market capitalisation to RM721 million.