KUALA LUMPUR (Jan 13): Engineering and construction services provider Kimlun Corp Bhd (KL:KIMLUN) is selling a plot of freehold land measuring 56.5ha in Kota Tinggi, Johor, for RM55 million to KT Techpark Sdn Bhd.

Its indirect wholly owned unit Kitaran Lintas Sdn Bhd has inked the agreement for the sale, according to its bourse filing on Monday. KT Techpark is a 50%-owned entity, with Ng Say Piyu its largest shareholder, while Lam Fung Eng and Ng Chong Boon share equal ownership of the remaining stake.

The land has been used for oil palm plantation. Over the past three years, the land produced 1,950 tonnes of fresh fruit bunches (FFB). According to Kim Lun's latest audited financial statements for FY2023, the land contributed to a net loss of RM500,000 for the year.

The sale price represents a 59.98% premium over the land's net book value of RM34.48 million as of Dec 31, 2023. No valuation exercise was conducted on the land.

Kimlun views the sale as an opportunity to unlock and realise the land's value, with the group expected to record a net gain of RM13.7 million.

The disposal proceeds will be used for general working capital and to fund a property development joint-venture company (JVco) with Singapore-listed Astaka Holdings Bhd, Astaka Kimlun Sdn Bhd. Kimlun holds 49% in Astaka Kimlun through its wholly owned Kii Amber Sdn Bhd, while Astaka's 50.99%-owned Astaka Capital Sdn Bhd owns 51% in the JVco.

The sale is expected to be completed within nine months, or by October this year.

Kimlun Corp Bhd's shares ended two sen lower at RM1.12 on Monday, giving the group a market capitalisation of RM395.79 million.