KUALA LUMPUR (Feb 22): Infrastructure and construction company Ekovest Bhd is disposing of 13 parcels of land measuring a total of 12,400.139 sq m in Section 85 along Jalan Pahang here to Airman Sdn Bhd, a wholly-owned subsidiary of Lim Seong Hai Holdings Sdn Bhd (LSHHSB), for RM66.8 million.

The proposed disposal is deemed a related party transaction as Ekovest managing director Tan Sri Lim Keng Cheng is a major shareholder and director of LSHHSB, with a 25% stake.

Ekovest plans to use the proceeds arising from the disposal to reduce its debts and for working capital purposes. The expected gain from the proposed disposal is approximately RM11 million.

In a filing with Bursa Malaysia on Thursday, Ekovest said its property development arm Ekovest Properties Sdn Bhd has entered into sale and purchase agreements with Airman for the disposal of the 13 parcels of land. Datuk Lim Keng Guan and Lim Pak Lian — who are directors of Airman — together with Keng Cheng and Lim Keng Hun each hold an equal stake of 25% in LSHHSB.

According to Ekovest, the 13 parcels of adjoining land are sited on the left (western) side of Jalan Pahang, travelling from Kuala Lumpur city center and Bulatan Pahang towards Gombak and Setapak localities. Kuala Lumpur city centre and Bulatan Pahang are located about 5km and 1.5km due south of the land.

The land also has the benefit of a development order issued for mixed development.

The transaction amount was derived based on negotiations between the parties on a willing-buyer, willing-seller basis. No valuation was carried out on the land as the percentage ratio for the proposed disposal is below the 5% threshold pursuant to paragraph 10.04 (1) of the Main Market listing requirements of Bursa Malaysia.

Ekovest said the divestment of land enables the immediate realisation of the land value. "This transaction is anticipated to have a beneficial financial effect to the group, reflecting positively on the overall revenue and cash flow."

"The proposed disposal will not have any effect on the share capital or substantial shareholders’ shareholdings and are not expected to have any material effect on the group's earnings per share, net assets per share and gearing for the financial year ending June 30, 2024," it added.

The proposed disposal does not require the approval of shareholders and/or other relevant authorities and is expected to be completed in the third quarter of 2024.

Ekovest shares closed down 0.5 sen or 1% at 49.5 sen, bringing it a market capitalisation of RM1.45 billion. A total of 33.48 million shares were traded. Ekovest's share price has slipped 2.94% so far this year, but is up 17.86% over the past year.