KUCHING: Leader Steel Holdings Bhd (LSteel) is buying a piece of industrial land in Sejingkat Industrial Park here for RM9.8 million to facilitate the group’s expansion in East Malaysia.
Wholly-owned subsidiary Leader Steel Sdn Bhd (LSSB) has entered into a conditional sale and purchase agreement (SPA) with Sumbumi Sdn Bhd to acquire the vacant land measuring 3.79 hectares.
LSSB, which is principally engaged in the manufacturing and trading of steel products, will pay for the purchase via internally generated funds and bank borrowings, LSteel said in a filing with Bursa
Malaysia.
The LSteel group will determine the exact mix of internally generated funds and bank borrowings at a later date after due consideration of the group’s gearing level, interest costs and internally cash requirement for its business
operations.
It said the purchase price was arrived at on a “willing buyer willing seller” basis through direct negotiations between the parties after considering prevailing market conditions.
Sumbumi’s principal business activities are production and sales of reinforced concrete piles.
“The acquisition is in line with LSteel group’s strategy to expand its plant and office operations to cater to business expansion in the East Malaysian area and consolidate all operations in one location,”
it added.
The land to be acquired is adjacent to LSSB’s existing branch and is, therefore, strategic and would complement business operations going forward, according to
LSteel.
“The board is of the opinion that the acquisition will contribute positively to the business operations and future earnings of the
group.”
LSteel said under the salient terms of the SPA, Sumbumi has to secure the consent of the Kuching Land and Survey director and/or of the relevant authorities, if applicable, to effect the disposal and the transfer of the said vacant land to LSSB within nine months from the SPA date.
Sumbumi will apply and secure the approval of the extension of building condition from the relevant authorities within four months from the local council’s approval date, and secure the issuance of lease title within nine months from the SPA date.
On the part of the LSSB, it will prepare the building plans and drawings, apply and secure the approval for building plans and drawings from the relevant authorities within four months of the SPA date.
“The SPA shall become unconditional on the business day on which the conditions precedent are fulfilled,” said LSteel.
Meanwhile, Perdana Petroleum Bhd (PPB) said its 100 percent-owned unit Intra Oil Services Bhd had accepted the letter of award from DESB Marine Services Sdn Bhd to charter a workboat for 180 days from April 15, 2019 for RM8.5 million.
The deal, which is deemed a recurrent related party transaction (RRPT), has an option to extend for 150 days.
DESB Marine Services is a wholly-owned subsidiary of Dayang Enterprise Holdings Bhd, which is the single largest shareholder of
PPB.
“The PPB group’s offshore supply vessels (OSV) operations complement those of Dayang and its group of companies whose principal activities are the provision of offshore topside maintenance services, minor fabrication works and offshore hook-up and commissioning services.
“The vessels charter is part of the strategic alliance between Dayang group and PPB group where the utilisation of its vessels can be maximised and qualified to bid for more offshore maintenance works,” PPB said in a filing with
Bursa.
PPB said the company’s amount transacted under the RRPT with the Dayang group for the preceding 12 months (excluding the latest RM8.5 million) was RM99.9 million as of March 31, 2019, which exceeded the estimated value of RM49 million approved by its shareholders in the previous AGM on May 23, 2018.
