KUALA LUMPUR (Aug 9): PN-17 status Perak Corporation Bhd is disposing of a piece of agricultural land in Perak to Kim Poh Sitt Tat Feedmill Sdn Bhd (KPSTF)for RM5.5 million cash as part of its regularisation plan.

In a filing with Bursa Malaysia on Wednesday (August 9), the company said it had entered into a Sale and Purchase Agreement with KPSTF for the disposal, which is expected to be completed by year-end.

The directors and shareholders of KPSTF are Tan Kuang Liang with 50.05% and Tan Kwang How with a 49.95% stake.

Perak Corp acquired the land on Sept 23, 2013 at the cost of RM2.39 million. The net book value of the property at RM2.41 million is based on its latest audited financial statements as at December 31, 2022.

The proposed disposal is an interim measure to raise the necessary cash proceeds required for the group’s business regularisation plans, which are still being finalised.

The proposed disposal is expected to result in an estimated net gain arising from the disposal of RM2.35 million at the company and group levels.  

The estimated net gain of RM2.35 million is derived based on the consideration of less land cost and other costs and estimated tax expenses at 24%.  

The actual gain arising from the proposed disposal of the property will vary depending on the net book value of the property as at the time of completion of the disposal.  

The proposed disposal is expected to contribute positively to the earnings per share by approximately 2.35 sen per share while the proforma effect on the net assets per share of the company is expected to increase by approximately 2 sen and will reduce the group’s gearing ratio by 1%.

Perak Corporation’s shares closed unchanged at 28.5 sen, valuing the company at RM28.5 million.