KUALA LUMPUR (June 11): Crescendo Corp Bhd (KL:CRESNDO) announced another land sale to a data centre company. This time around, the property developer is selling a parcel of land in Pulai for RM115.88 million, cash.
Crescendo’s wholly owned unit Panoramic Industrial Development Sdn Bhd (PID) has inked a conditional sale and purchase agreement with Singapore-based data centre firm Digital Halo Pte Ltd for the land transaction. The tract measures about 20.463 acres, according to a stock exchange filing.
The latest transaction marks the sixth land sale in seven months.
In total, Crescendo has sold over 150 acres of land for data centre-related development, bringing in sales proceeds of more than RM790 million, cash.
At at end-January this year, the group had cash and bank balances of RM54.9 million, while its short-term loan amounted to RM81.61 million and long-term loans totalled RM267.26 million.
The selling spree seems to have powered the rally on Crescendo’s share price, which has climbed over 56% year-to-date.
Crescendo stated in the filing that the disposal consideration of RM115.88 million, or RM130 per square foot (psf), was negotiated on a “willing-buyer, willing-seller” basis, considering PID’s recent disposals in nearby areas to other data centre operators, including Microsoft Payments (Malaysia) Sdn Bhd.
The estimated net gain from the proposed disposal, which is expected to be completed in the second half of this year, is RM71.21 million. The exercise is subject to approvals from Crescendo’s shareholders, as well as the Johor State Authority.
“The vacant industrial land is currently not used for Crescendo [or] its subsidiaries’ business operations, thus is not generating any cash flow for the group,” said the group.
“Moving forward, the group intends to focus its resources on six ongoing development projects and should opportunities arise, take advantage of land banking opportunities and joint ventures in other strategic locations. The group will have the flexibility and liquidity to pursue investment opportunities or projects requiring large capital expenditure, while strengthening the group’s working capital position,” it added.
Of the net cash proceeds of RM113.77 million, the group has allocated RM69.68 million for working capital; RM40 million for funding its ongoing development projects, primarily the Desa Cemerlang project; and RM4.09 million for estimated expenses related to the proposed disposal.
Shares of Crescendo rose five sen or 1.32% to close at RM3.84 on Tuesday, giving it a market value of RM1.08 billion.