KUALA LUMPUR (Nov 17): Crescendo Corp Bhd has announced its third land disposal in Pulai, Johor Bahru, this time three vacant pieces of land measuring 2.62 million sq ft for RM315.17 million cash to Microsoft Payments (M) Sdn Bhd.
Crescendo, through its subsidiary Panoramic Industrial Development Sdn Bhd (PID), had earlier this month announced the disposal of two parcels of land for RM117.02 million, and another nine parcels for RM111 million — both near the vicinity of the latest proposed land for sale.
With the third land sale, the gross proceeds to be raised by Crescendo for the exercises would total up at RM543.19 million, compared with the costs incurred for acquisition, development and financing of RM69.4 million.
Crescendo shares jumped 19 sen or 13.1% following the announcement to trade at its intra-day high of RM1.64 at the time of writing – its highest in eight years – as trading volume surged 13 times its two-month average to 1.09 million shares.
It previously announced the sale of nine parcels for RM111 million to Yu Ao Sdn Bhd on Nov 15, and the other two parcels for RM117.02 million to Singapore-based data centre operator STT GDC Malaysia 2 Sdn Bhd on Nov 7.
For its latest disposal announced today, the consideration price is supported by the market value of RM315 million ascribed by the valuer, Crescendo said. It expected a net gain on disposal of RM171.92 million from the exercise.
The proposed disposal took into consideration “the marketability and prospects of the subject properties and the challenges in negotiating terms and securing buyers with strong credentials and financial capability to complete the sale of such sizeable land expeditiously”, Crescendo said.
The land is located within the Nusa Cemerlang Industrial Park, and the purchaser intends to develop a data centre on-site, Crescendo filing showed.
“The proposed disposal will lead to value creation for the surrounding lands owned by the group,” said the company.
Proceeds from the sale will fund debt repayments (RM95 million), further development of Crescendo’s Bandar Cemerlang project in Ulu Tiram, Johor (RM60 million), working capital (RM111.77 million), development costs to be incurred as part of the disposal (RM36.9 million) and related expenses of the exercise (RM11.5 million).
The sale and related exercise will require shareholders approval at a general meeting, as well as Johor state authority and the Iskandar Puteri City Council.
Crescendo is 70% owned by the founding Gooi family, which also has a controlling stake in plantation group Kim Loong Resources Bhd.
As at end-July 2023, Cresendo has short- and long-term borrowings of RM77.39 million and RM204.2 million respectively, against cash balances of RM64.9 million.
This gives it a net debt position of RM216.69 million, and a net gearing ratio of 0.22 times. The group had retained earnings of RM644.52 million.
At RM1.64, the group had a market capitalisation of RM388.39 million.