KUALA LUMPUR (JAN 24): Packaging manufacturer and developer Scientex Bhd (KL:SCIENTX) on Friday said it is acquiring 528.49 acres of land in Paya Rumput, Melaka for RM333.8 million cash (RM14.50 per sq ft) from Genting Plantations Bhd (KL:GENP).

Scientex said the acquisition will boost its existing landbank, which aligns with the company’s goal to build more affordable homes, according to its filing. The group is targeting to complete 50,000 affordable homes nationwide by 2028. 

“The land are expected to provide a steady and sustainable property development model as Scientex continues to focus on affordably priced landed properties where demand continues to remain firm and resilient,” it said.

Scientex via its indirect wholly owned subsidiary Scientex Heights Sdn Bhd entered into two conditional sale and purchase agreements with Genting Plantations’ subsidiaries, namely Genting Plantations (WM) Sdn Bhd (GPWM) and Genting Property Sdn Bhd (GPSB) to purchase the land.

Scientex planned to purchase the land through its internally generated funds and bank borrowings. As of October last year, the group’s cash and bank balances stood at RM116.21 million, while borrowings amounted to RM1.43 billion, its latest financial statements showed.

“The proposed acquisitions are expected to enhance the future earnings of Scientex when the proposed development of the land comes onstream subsequently,” it said, expecting the acquisition to be completed in the second half of 2025.

Meanwhile, Genting Plantations said the land disposal will generate a one-off gain of about RM284.92 million or 32 sen per share. The group acquired the land in April 1981 for an initial investment cost of RM2.09 million.  

“The proposed sale represents the most viable option compared to continuing the existing plantation activities or potentially undertaking property development activities on the subject land,” Genting Plantations said in a separate filing.

The plantation group, in which Genting Bhd (KL:GENTING) owns a 55.39% stake, expects no significant impact on the group’s future income stream from its plantation activities as the planted area is less than 1%.

“While the proposed sale would rule out utilising the subject land for other potentially rewarding commercial initiatives in the future, such as property development, Genting Plantations believe that it can enhance such returns from its other strategically-located landbanks,” it added.

Scientex’s shares settled down three sen or 0.74% to RM4.02 on Friday, valuing the group at RM6.26 billion.

Shares in Genting Plantations, on the other hand, closed unchanged at RM5.80 on Friday, giving the group a market capitalisation of RM5.2 billion.