KUALA LUMPUR (Dec 5): Maxland Bhd (KL:MAXLAND) has signed a 60-year land lease agreement to set up a data centre in the Kulim High-Tech Park (KHTP) in Kedah.
Its indirect wholly owned Maxland Data Sdn Bhd (MDSB) entered into the agreement on Thursday with Kulim Technology Park Corp Sdn Bhd to lease a 4.57-acre parcel in Industrial Zone Phase 2 of KHTP for RM9.95 million, which will be funded through internal funds and bank borrowings.
As at the end of September, Maxland had cash and bank balances of RM2.65 million, while borrowings totalled RM17.17 million.
According to its filing with Bursa Malaysia, the 60-year lease will commence on Dec 15, 2024, and end on Dec 14, 2084. The agreement includes an option for a 39-year renewal, subject to mutual agreement and approval from the Kedah state authority.
The RM9.95 million lease price, calculated at RM50 per sq ft, was agreed upon on a "willing-buyer, willing-seller" basis. Payment terms include a 10% deposit of RM995,346 within 14 days of signing the lease agreement, with the remaining 90%, amounting to RM8.96 million, due within six months.
In a separate filing, Maxland announced that MDSB had signed a memorandum of understanding (MOU) with Global Data Centre Sdn Bhd to collaborate on potential projects, particularly in the power industry, including data centres, solar energy, and power plants in Malaysia.
“Given the rapidly growing demand for data centres in the region and the strategic advantages Malaysia offers, MDSB) sees a prime opportunity to establish a data centre. The company aims to leverage the current market conditions, positioning itself to benefit from the surge in digital transformation while meeting the increasing regional demand for cloud services and data storage,” said Maxland.
“With the advent of artificial intelligence (AI) and ever-increasing content and storage consumption, the company envisages that together with favourable government policies, tax incentives and support the data centres business looks promising and will bring good returns,” the group added.
Formerly known as Priceworth International Bhd, Maxland’s core business involves the sale of processed wood products (timber) and shipbuilding and repair services.
The group said there are ongoing challenges in the timber market, which are expected to impact its performance for the financial year ending June 30, 2025 (FY2025). For the first quarter ended Sept 30, 2024 (1QFY2025), the timber sector contributed 79% of its revenue.
Maxland is currently negotiating a debt restructuring plan and awaiting a High Court decision on a key liability, following a warning from its auditors regarding a “material uncertainty” in the FY2024 financial statement, which raises doubts about its ability to continue as a going concern.
Maxland’s auditors highlighted that the group incurred a net loss of RM61.2 million for FY2024 alongside a gross loss of RM31.5 million. Further, Maxland’s current liabilities exceeded its current assets by RM69.8 million, a shortfall primarily attributed to two significant obligations amounting to RM80 million owed to third-party creditors.
Maxland shares closed unchanged at 7.5 sen on Thursday, valuing the company at RM120.3 million. Year-to-date, the stock has declined by over 16%.