KUALA LUMPUR, 15 JULY: Malakoff Corp Bhd is paying RM25 million to Media Prima Bhd for a block of leasehold industrial land in Klang. The land acquisition comes just two weeks after Media Prima announced its intention to buy back from Permodalan Nasional Bhd (PNB) the freehold property in Bangsar where its Balai Berita headquarters is located for RM156.4 million. The asking amount is greater than the RM118.7 million Media Prima received when it was sold to PNB in 2018.
Tan Sri Syed Mokhtar Al-Bukhary is a common shareholder in both companies.
As a result, the new land sale is considered a related party transaction because Malakoff is an 18.37 percent-owned affiliate business of MMC Corp Bhd, the flagship of Syed Mokhtar, who also owns a 31.9 percent ownership in Media Prima.
Malakoff stated in a statement that its wholly-owned subsidiary Alam Flora Environmental Solutions Sdn Bhd (AFES) has signed a sale and purchase agreement for the land with Media Prima’s wholly-owned subsidiary The New Straits Times Properties Sdn Bhd.
In Kawasan Perindustrian Bandar Sultan Sulaiman, Klang, the land measures 23,370 square meters and has two single-story detached factory warehouses.
The purchase will be paid for with revenues generated internally.
The power company, which three years ago purchased the waste management firm Alam Flora Sdn Bhd, said the land will allow it to establish a recovery facility as an offsite facility to handle various sorts of garbage and expand its environmental business segment in line with its strategic strategy.
In 2018, Malakoff purchased Alam Flora from DRB-Hicom Bhd, another Syed Mokhtar company, for RM944 million in cash.
The land is a good recovery facility because it is located in an industrial zone, is compatible with the surrounding land use in accordance with the Department of Town and Country Planning Malaysia requirements, and has a buffer of more than 500 meters to the nearest sensitive receptors, according to the report.
In its statement with Bursa, Media Prima, on the other hand, stated that the land transaction is expected to result in a one-time net gain of RM12.09 million.
The aim, according to Media Prima, is to lower its bank borrowings, allowing it to conserve cash reserves for satisfying its business’s cash flow requirements.
“The planned disposal is consistent with the Group’s policy of selling properties in non-strategic locations with little development potential,” Media Prima said.
Media Prima forecasts its borrowings to fall to RM100.85 million by December 31, 2020, from RM125.49 million. The company’s gross gearing ratio would drop to 0.49 from 0.54, while its net gearing ratio would drop to “not relevant” levels from 0.01 times, according to the exchange filing./n
