KUALA LUMPUR (June 3): Sin Heng Chan (Malaya) Bhd (SHC Malaya) plans to dispose of its plantation unit for RM10.5 million, which will see it booking a net gain on disposal of about RM5.3 million.

The group told the bourse it had entered into a conditional share sale agreement with Borneo Agro-Resources Sdn Bhd to dispose of the entire equity interest in SHC Tubau Plantation Sdn Bhd (SHC Tubau), a wholly-owned subsidiary of SHC Malaya, for RM10.5 million, cash.

The proposed disposal also entails the disposal of an effective 100% equity interest in Tubau Corporation Sdn Bhd (Tubau Corp), a wholly-owned subsidiary of SHC Tubau.

SHC Tubau is principally engaged in the cultivation of oil palm, while Tubau Corp is principally involved in property holding.

"The rationale for the proposed disposal is to enable us to realise the value of investment in these units to enable the group to focus on the operations of remaining estate," it said.

SHC Malaya will also be on the lookout for acquisition of strategic investments and/or strategic joint ventures to further enhance shareholders' value.

Proceeds from the proposed disposal will be utilised to finance the day-to-day operations and to pare down the borrowings of the group.

"The board may also decide to utilise the proceeds to invest in new strategic options and opportunities," it added.

SHC Malaya shares were last traded on Wednesday when it closed two sen or 3.51% lower at 55 sen, valuing the group at RM63.29 million.