KUALA LUMPUR (May 2): PLB Engineering Bhd (KL:PLB) is selling five parcels of land in Tasik Gelugor, Penang, to a property developer for RM48 million in cash. The proceeds from the sale will be used to repay bank borrowings. The selling price is below the RM60.8 million valuation provided by an independent appraiser earlier this week.

The land parcels, spanning 199.5 acres (807,157.86 square meters), are being sold to Telaga Raya Sdn Bhd, a company wholly owned by Lechumenan Elangowan.

According to PLB's bourse filing on Friday, the parcels, which had a net book value of RM30.38 million as of the end of August 2024, were acquired by PLB in 2013. Independent appraiser Henry Butcher Malaysia (Penang) Sdn Bhd valued the land at RM60.8 million on Tuesday.

PLB said it decided to accept Telaga Raya's offer to monetise the land bank without further delay, rather than wait for other potential buyers, after the company engaged in negotiations with several potential buyers over the past few years but none materialised.

PLB anticipates a net gain of RM12.88 million from the transaction. This figure is calculated based on the RM48 million disposal consideration against the RM30.38 million net book value, land-related costs, and estimated taxation and expenses associated with the sale.

The company said this sale aligns with its strategy to monetise its land bank to reduce its gearing and strengthen its financial position. As of the end of February 2025, PLB’s total borrowings stood at RM146.32 million, while trade and other payables amounted to RM133.14 million. The company’s cash and bank balances were RM6.18 million.

PLB intends to allocate RM33.33 million of the proceeds to repay trade creditors and for working capital, RM10 million to repay bank borrowings, and the remaining balance for taxes and estimated expenses related to the sale.

The disposal is subject to the approval of shareholders and is expected to be finalised by the end of this year.

Shares in PLB were last traded at RM1 on April 17, giving the company a market valuation of RM112.4 million.