KUALA LUMPUR (July 19): Genting Plantations Bhd (KL:GENP), in which Genting Bhd (KL:GENTING) owns a 55.4% stake, is planning to buy two plots of land in Indonesia for RM593 million, for property development.

The plots, measuring 152ha, are located in Sentul City, in the Bogor Regency of the West Java Province in Jakarta, according to GENP's bourse filing on Friday.

The plantation group said its indirect subsidiaries had inked separate sale and purchase agreements (SPAs) with three vendors — PT Sentul City Tbk, PT Aftanesia Raya and PT Primatama Cahaya Sentosa — to buy the plots.

It is buying the first plot of land, which measures 80ha at 1.76 billion rupiah or RM509.8 million. The second, measuring 72ha, is being bought for 288 billion rupiah or RM83.2 million.

GenP plans to finance the acquisition using internal funds and bank borrowings. While the proposed acquisition will result in higher gearing, the company said it doesn't expect this to impact its earnings for the financial year ending Dec 31, 2024 (FY2024).

As at end-March 2024, GenP’s cash and bank balances amounted to RM944.41 million, while total borrowings stood at RM2.16 billion.

The group said that the proposed acquisitions, which are scheduled to be completed in the first quarter of 2025, align with its objective to expand its presence in Indonesia.

“Sales of recent developments within and nearby the Sentul City township has seen strong demand for landed residential properties with most enjoying strong offtake within the initial months of their respective launching," it said, adding the plots it is buying can potentially capitalise on buyer interest in the township for future property development initiatives.

GenP shares closed three sen or 0.51% higher at RM5.88 on Friday, valuing the group at RM5.28 billion.