PETALING JAYA, 14 June: LTKM Bhd plans to buy four parcels of adjoining land measuring 25,837 sq m, currently occupied by CN Asia Corporation Bhd, for RM58.4 million, for future property development.
CN Asia’s disposal is part of the PN17 classified company’s initiative to regularise its financial condition.
In a stock exchange filing yesterday, LTKM said it is buying a leasehold land measuring 9,669 sq m that houses CN Asia’s existing factory and another 6,559 sq m vacant land from the CN Asia’s wholly owned subsidiaries, Chip Ngai Engineering Works Sdn Bhd and Douwin Sdn Bhd, for RM36.68 million.
LTKM also agreed to buy two other leasehold land measuring 4,760 sq m and 4,849 sq m respectively from Crystal Bond Sdn Bhd and Marvellous Production Sdn Bhd.
CN Asia’s managing director and biggest shareholder Ho Cheng San as well its director Angeline Chan Kit Fong are also the directors and shareholders of Crystal Bond and Marvellous Productions. Ho holds a 99.9% stake in both companies, while the balance is held by Chan.
CN Asia said it will use the sale proceeds mainly to repay its bank borrowings (RM11.79 million) and future working capital (RM22.8 million).
“The board believes that the proposed disposals will enable the group to unlock capital resources from being tied up in long-term assets to strengthen its financial position and allow the group to better focus on its core businesses,” CN Asia said.
In order not to disrupt the on-going business operations of the group, CN Asia has signed a tenancy agreement on the two parcels of land for a maximum period of up to 36 months subsequent to the proposed disposals.
CN Asia said it will identify and construct its new manufacturing facility, office and storage area before the expiry of the tenancy agreements.
Meanwhile, LTKM said its potential development may include medium to high range residential and commercial buildings.