KUALA LUMPUR (Oct 19): Lafarge Malaysia Bhd's disposal of its unit Lafarge Aggregates (Ipoh) Sdn Bhd for RM28 million announced earlier this week was based on a willing buyer willing seller basis, after taking into consideration the net assets, discounted cash flow of LAI and market valuation, said the company.

“The purchase consideration of RM28 million was arrived at on a willing buyer willing seller basis, after taking into account our net assets, discounted cash flow and market valuation of our assets,” the group said in clarification to Bursa Malaysia today.

Lafarge Malaysia’s net assets as at Dec 31, 2015 were valued at RM9.8 million, whereas its discounted cash flow based on continued self-operation model now stands at RM14.5 million.

The market value of the group’s quarry lands on industrial land based on inspection conducted in Nov 2008, was about RM22.5 million for 100 acres (about RM5.17 per sq ft). The current market listing of comparable industrial lands in the vicinity is about RM6.37 per sq ft at present, totalling RM27.8 million for 100 acres.

Earlier, Lafarge Malaysia’s wholly-owned subsidiary Lafarge Aggregates Sdn Bhd signed an agreement with Cabaran Premix Sdn Bhd to sell its entire stake in Lafarge Aggregates Ipoh.

The proceeds from the disposal, according to the group, would be utilised for working capital and investment purposes.

The disposal of Lafarge Aggregates Ipoh is in line with Lafarge Malaysia's strategic plan to dispose of its assets with lower returns and to generate cash to invest in assets which “would generate better returns and have greater strategic importance,” the group said.

Lafarge Malaysia’s share price rose 2.6% to close at RM8.40 today, giving it a market value of RM7.14 billion.