KUALA LUMPUR (Sept 11): UEM Sunrise Bhd is disposing of a 4.01-acre parcel of land in Kiara Bay, Kuala Lumpur for RM85 million to repay its debt obligations and fund its working capital for new product launches.

UEM Sunrise’s indirect unit Mega Legacy (M) Sdn Bhd (MLSB) is selling the land to Pembinaan Kery Sdn Bhd (PKSB), a unit of Melati Ehsan Holdings Bhd.

At the same time, MLSB entered into a development rights agreement (DRA) with PKSB to develop the land at a development rights value of at least RM93.5 million, UEM Sunrise said.

The deal is deemed a related party transaction, as Melati Ehsan’s executive chairman and director Tan Sri Yap Suan Chee also holds an indirect stake of 50% in MLSB through Mega Legacy Equity Sdn Bhd (MLESB).

The disposal is expected to be completed in the first half of 2024.

UEM Sunrise said the disposal will allow it to fund working capital for the launch of its upcoming product, Residensi ZIG, also in Kiara Bay, tentatively scheduled for this quarter.

Meanwhile, the DRA allows it a degree of control over the development of the land, considering that the land will no longer be owned by MLSB, UEM Sunrise added.

“In its role as the master developer of Kiara Bay, it is vital for MLSB to uphold development concepts which align to the current Kiara Bay’s conceptual and development master plan. Kiara Bay has a balance estimated development period of another 17 years,” the group said.

The land purchase price was arrived at on a willing buyer willing seller basis after taking into consideration the market valuation of the land as appraised by Messrs Rahim & Co in its valuation certificate dated Feb 20, of RM85 million.

The land, which is located near Kepong Metropolitan Park, approximately 13 kilometres northwest of the KL City Centre, is directly accessible from the KL Middle Ring Road Two and Jalan Kepong.

A 2.5-km spine road called Persiaran Putra Bayu connects to Jalan Kepong allowing users to commute to the nearest MRT stations.

UEM Sunrise’s shares closed down 1.5 sen or 2.08% to 70.5 sen, valuing the group at RM3.57 billion.