KUALA LUMPUR (July 20): Ajinomoto (Malaysia) Bhd is selling six parcels of land with redevelopment potential that are located along Jalan Kuchai Lama here to businessman Tan Sri David Law Tien Seng, better known as TS Law, for RM408 million, cash.
On disposing the leasehold plots measuring a total of 10.51ha, it plans to distribute RM128.89 million in special dividend at RM2.12 per share to shareholders at an entitlement date to be determined later.
In a bourse filing Thursday (July 20), Ajinomoto Malaysia said it has inked an agreement for the disposal with Paragon TSL Sdn Bhd, in which Law is a director and major shareholder via his shareholding in Paragon's ultimate holding company — TS Law Land Holdings Sdn Bhd. Law is also a majority shareholder of Main Market-listed steel company Hiap Teck Venture Bhd, which is mainly involved in steel pipe manufacturing, scaffolding equipment and hardware trading.
The food producer famed for its umami seasonings said it is selling the plots, which currently host its corporate offices and factories for the production of its seasonings, as they can no longer accommodate further capacity expansion.
The land sale will enable Ajinomoto Malaysia to monetise the assets and improve its financial position. Ajinomoto expects to realise a net pro forma gain of RM357.12 million from the disposal. The company will use RM83.39 million of the proceeds for the repayment of bank borrowing, and RM128 million for working capital. It also intends to use RM30 million to repay the advances from its ultimate holding company, Ajinomoto Co Inc.
The disposal consideration was also arrived at on a “willing-buyer willing-seller” basis, which represented a 12.09% premium to the market value of the land of RM364 million, as appraised by an independent property valuer.
When contacted, a spokeperson of TS Law Land told The Edge that the company is in the midst of crafting a masterplan for the six parcels of lands.
“The area is long-overdue for something fresh and exciting. We are hopeful that the development will definitely transform and rejuvenate Kuchai Lama. We would like to bring a new concept of work, live, play, and convenience with better integration with various modes of transport for this area, especially given that there is a new MRT station near the site which will provide great convenience,” he said.
He added that TS Law Land believes the government would welcome such private sector investments, and would provide the right framework, incentives and policies to encourage more of such investments.
Ajinomoto Malaysia shares gained 28 sen or 1.78% to close at RM15.98 on Thursday, valuing the company at RM971.56 million. The stock has gone up 7% in the past month.