KUALA LUMPUR (Dec 29): Petaling Tin Bhd is disposing of five parcels of land totalling 116.11 acres in Ulu Yam, Selangor, to property developer Ringgit Muhibbah Sdn Bhd for a combined RM45.59 million cash to unlock the value of the land and improve the group's cashflow.

In a filing with Bursa Malaysia today, Petaling Tin said its wholly-owned subsidiary PTB Development Sdn Bhd has signed two separate sale and purchase agreements (SPAs) with Ringgit Muhibbah for the proposed disposal.

The first SPA was signed between PTB Development, Ringgit Muhibbah and Asali Developments Sdn Bhd, which is the registered proprietor for the sale of two parcels of leasehold land measuring 66.383 acres for RM25.78 million cash.

The second agreement was signed between PTB Development and Ringgit Muhibbah, which involves the sale of three parcels of leasehold land measuring 49.727 acres for RM19.81 million.

"The proposed disposal will enable Petaling Tin to raise funds for the working capital requirements of the group," said the group.

Petaling Tin noted that the land has been designated for mixed development of residential and commercial use. It is located on the southern outskirt of Ulu Yam Baru, some 8km off the Kuala Lumpur-Ipoh trunk road.

"The original cost of investment for the land was RM15.5 million. Based on the latest audited consolidated financial statements of Petaling Tin Group for the financial year ended Dec 31, 2014, the land has a net book value of RM15.65 million," it added. No valuation was carried out on the land.

Upon completion of the proposed disposal, the group is expected to realise a net gain of disposal of RM28.98 million, which translates into a gain of 8.37 sen per share.

The proposed disposal will also, on a pro-forma basis, increase the group's consolidated net assets from RM1.04 per share to RM1.12 per share, said Petaling Tin.

The proposed disposal is expected to be completed within nine months from the date of the SPAs, it added.

Petaling Tin shares closed 0.5 sen or 2.17% higher at 23.5 sen today, for a market capitalisation of RM79.5 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.)