KUALA LUMPUR (Oct 14): Property developer Kuchai Development Bhd (KL:KUCHAI) announced that it has become a cash company following the completion of its disposal of assets and liabilities to Sungei Bagan Rubber Company (M) Bhd (KL:SBAGAN).

Kuchai received notification from Bursa Securities on Monday, stating that the company triggered Paragraph 8.03(1) of the Main Market listing requirements.

Under this rule, a listed issuer is considered a cash company if 70% or more of its consolidated assets consist of cash, short-term investments or a combination of both.

Earlier this month, Kuchai announced that the disposal of its assets and liabilities to Sungei Bagan had been revised lower due to the state authority’s rejection of a land transfer in Semenyih from Kuchai to Sungei Bagan.

As a result, the disposal sum was adjusted to RM267.78 million, down from RM275.47 million, while the number of consideration shares to be issued was reduced to 26.75 million from 27.52 million. Kuchai’s direct equity interest in Sungei Bagan increased to 28.79% after receiving the consideration shares, slightly lower than the previously reported 29.37%.

The transaction, announced in December last year, involved Sungei Bagan acquiring most of Kuchai’s assets in exchange for shares priced at RM10.01 each.

Kuchai proposed a 20 sen dividend per share for its shareholders for the financial year ended June 30, 2024 (FY2024), while Sungei Bagan proposed a dividend of eight sen per share for the same financial period.

Kuchai and Sungei Bagan are controlled by Kluang Rubber Company (Malaya) Bhd (KL:KLUANG), whose ultimate major shareholder is Nyalas Rubber Estates Ltd. Nyalas Rubber is controlled by Lee Thor Seng, who also has direct interest in Sungei Bagan and Kuchai.

Shares of Kuchai closed up one sen or 0.46% to RM2.17 on Monday, giving it a market capitalisation of RM267.3 million. Sungei Bagan dropped 10 sen or 1.6% to RM6.15, valuing it at RM580.8 million.