KUALA LUMPUR (Sept 12): PBA Holdings Bhd (KL:PBA) has secured approval to acquire a 4.11-acre site in George Town for RM20 million, after the Penang state government agreed to cut the land premium by RM35.38 million.

The land on Macallum Street will be used for the construction of a pump house, the operations and maintenance of the third twin submarine pipelines, and future water infrastructure projects, PBA said in a filing with Bursa Malaysia on Friday.

The company said its wholly-owned subsidiary Perbadanan Bekalan Air Pulau Pinang Sdn Bhd (PBAPP) had initially been offered the land at a premium of RM55.38 million for the 99-year lease.

PBAPP then appealed for a reduction on the grounds that it had reclaimed the land at a cost of about RM8 million, while part of the reclaimed area had already been surrendered to the state without charge.

PBA said the premium will be settled via internally generated funds, with completion targeted by December.

The exercise is deemed a related party transaction as the Penang government, through the state secretary, holds a 55% stake in PBA. State secretary Datuk Seri Zulkifli Long and Penang chief minister Chow Kon Yeow, together with Datuk Dr Mohamad Abdul Hamid, Datuk Zabidah Safar, Zairil Khir Johari and Fadzil Abdullah, were among government-appointed directors who abstained from deliberations and voting on the matter.

PBA said the transaction will not affect its share capital, major shareholdings, net assets or earnings for the financial year ending Dec 31, 2025.

Shares in PBA closed one sen or 0.51% lower at RM1.94 on Friday, giving the group a market capitalisation of RM642.66 million. Year to date, the stock has declined over 12%.